Federal Finance Minister Christian Lindner (FDP) expects permanently high energy prices. “It will be a new normal. Gas via the liquid gas terminals is more expensive than Russian pipeline gas for logistical reasons alone,” Lindner told the “Bild am Sonntag. “The price level remains higher, but without ruinous peaks.”
Lindner reiterated the federal government’s expectation of slightly declining inflation rates: “For 2023 we expect seven percent, but in 2024 and thereafter the numbers will continue to fall according to the forecasts.” The target remained two percent. That must be the top priority for the European Central Bank and the federal government, “because persistently high inflation would undermine our economic foundations,” Lindner said.
In the face of resistance from the SPD and the Greens, Lindner is refraining from tax cut plans from his ministry. “As long as there is no new thinking among the coalition partners, I will concentrate on what is achievable,” he said. Lindner named tax incentives for investments and research, faster planning and approval processes, digitization, immigration of skilled workers “through to the different possibilities of tax law”.
Lindner had asked his experts for suggestions on how the economic recovery could be accelerated and Germany’s competitiveness strengthened. In an internal paper that became known a week ago, a reduction in income tax was considered appropriate given the current economic situation. While the Union liked the proposal from the Ministry of Finance, it met with little approval from the FDP’s coalition partners.
Lindner again sharply rejected calls for tax increases for higher income groups. “50 percent of taxpayers pay 90 percent of wage and income tax revenue. A further burden would not be fair,” said the finance minister.
He called for a balance between solidarity and fairness: “In contrast to others, the so-called top earners from a good 66,000 euros do not receive the help of the gas price brake tax-free, but have to pay taxes on it. We’re not talking about millionaires, we’re talking about our specialists and managers who have worked hard for a qualification and bear responsibility for jobs.”
