Ensuring the Implementation of Proposed Commission Measures Already Underway

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As the 2025 federal election approaches in Germany, tax policy is shaping up to be a major point of contention among the major parties. Here's a breakdown of the key tax policy differences between the Social Democratic Party (SPD), Christian Democratic Union/Christian Social Union (CDU/CSU), Alliance 90/The Greens, Free Democratic Party (FDP), Alternative for Germany (AfD), Sahra Wagenknecht Alliance (BSW), and The Left Party.

The SPD, traditionally leaning towards social equality, advocates for raising taxes on high-income earners and large asset holders to address budget deficits and reduce inequality. The CDU/CSU, on the other hand, opposes tax increases and instead emphasizes fiscal consolidation and cutting social benefits. The Greens focus on social justice and environmental policies, with a general stance supporting increased fiscal measures targeting higher incomes to fund social and ecological initiatives. The FDP favors lower taxes and less intervention, resisting tax increases, especially on businesses and high earners.

AfD, a far-right party, historically supports reducing taxes broadly to stimulate economic growth, while specific 2025 tax policies are not fully outlined. BSW, a populist splinter group, likely emphasizes wealth redistribution and social welfare measures, but their tax policies are less documented. The Left Party advocates for significantly increased taxation on the wealthy and larger corporations, focusing on social justice and reducing inequality through progressive taxation.

In the ongoing government coalition (SPD-CDU), tensions are evident, with SPD pushing tax hikes on the wealthy and CDU resisting any increases amid high existing tax rates. This divergence captures the main fault lines in German tax policy debates in 2025.

While comprehensive detailed party manifesto tax breakdowns were not found, the following are some specific tax policy proposals from each party:

CDU/CSU: Full abolition of the solidarity surcharge, an increase in the commuter allowance, and reductions in real estate transfer tax, inheritance tax, and children in income tax.
AfD: Abolition of inheritance tax, wealth tax, property tax, all CO2 levies, and the real estate transfer tax for EU citizens.
Greens: Quick relief from CO2 pricing for building heat and traffic, integrating the solidarity surcharge into the income tax tariff.
Union: New tax subsidies that may not quite fit a party with an ordoliberal claim.
The Left: Increasing the top income tax rate to 53% at 81,000 euros, a wealth tax at a rate of 1% at 1 million euros in wealth, increasing to 5% at 50 million, and a billionaire's tax of 12%.
AfD: Reduced VAT rate of 7% for daily childcare needs, full VAT exemption for freelance musicians, artists, and teachers, and the introduction of a family splitting that expands the marital splitting for children.
BSW: Major reform of the income tax tariff, higher income at which the top tax rate applies to "very high incomes", reduction of network charges, VAT rate of 0% on staple foods, abolition of CO2 levies, and the real estate transfer tax on self-used residential property.
SPD: Reduction of value-added tax on food from 7% to 5%, reintegration of capital gains tax into income tax, increase in inheritance tax, reintroduction of a wealth tax, and the introduction of a financial transaction tax.
FDP: Abolition of the motor vehicle tax in the medium term and a reduced VAT on electricity.
The Left: Reducing income tax in the lower range, lowering electricity tax, introducing a climate allowance, and setting a 0% VAT rate on staple foods, hygiene products, public transport, with price controls to prevent companies from increasing profits, and reduced VAT rates on labor-intensive services, pharmaceuticals, and children's products.

As the election approaches, these tax policy differences will likely play a significant role in shaping the future of Germany's fiscal landscape.