1. Quick overview
The CDU’s campaign proposal to move the top tax threshold to €80,000 would push the current top-rate entry point (now around €69,000) higher. CDU general secretary Carsten Linnemann put the idea forward during state election campaigning, repeating a theme from the federal campaign: shift the Spitzensteuersatz so fewer people pay the highest marginal rate. The change is pitched as tax relief for higher earners such as team leaders or soon-to-be retirees, but it also carries a substantial fiscal price and political controversy.
Key facts at a glance
- Proposal: raise the income threshold for the top tax rate to €80,000 instead of the current ~€69,000.
- Who it affects: roughly 10% of taxpayers would be in scope.
- Top rate today: about 42% above the top threshold.
- Example saving: a single person earning €100,000 gross could save over €900 per year.
- Estimated fiscal cost: around €9 billion annually, according to DIW calculations.
- Political context: the SPD rejects the plan and calls for higher taxes on the well-off instead.
2. Who would benefit?
The proposal primarily helps higher earners who currently cross the top tax threshold. That includes managers on the lower scale of seniority, team leaders, some specialists, and people nearing retirement with higher incomes. It is not aimed at the typical middle-earning full-time worker, since the median full-time yearly income is about €47,000.
Which earners gain most
- Those earning between the current threshold and €80,000 would pay less tax on part of their income.
- Singles on roughly €100,000 gross would see modest savings (roughly in the low hundreds of euros per year).
- Super-rich taxpayers above much higher incomes gain less proportionally unless other rules change.
- Overall, the benefit concentrates on a relatively privileged minority rather than broad middle-income households.
3. Numbers and budget impact
Numbers cited in public debate give a quick sense of scale: around 10% of taxpayers are affected, the marginal top rate on income above the threshold is about 42%, and the immediate annual cost to the federal budget is estimated at about €9 billion. Policymakers and analysts are debating whether and how any shortfall could be financed.
| Item | Value | Notes |
|---|---|---|
| New top-rate threshold | €80,000 | Proposal to replace current ~€69,000 entry point |
| Share of taxpayers affected | ~10% | Relatively small portion of all taxpayers |
| Top marginal rate above threshold | ~42% | Current top marginal tax on income above the threshold |
| Example saving | >€900 | Approximate annual saving for a single person with €100,000 gross |
| Estimated fiscal cost | €9 billion | DIW calculation of annual revenue loss |
| Longer-term budget risk | Up to €60 billion by 2028 | Warnings that holes could grow without offsets |
| Total | — | Numbers are estimates and depend on further policy choices |
4. Political reactions and criticism
The plan has drawn mixed reactions. Supporters present it as targeted tax relief for hardworking higher earners. Critics say it is socially unbalanced and primarily benefits a privileged minority. The SPD rejects the idea and favors higher taxes on well-off households to preserve fairness. Some commentators have labeled the move a ‘Mogelpackung’ — a political sleight-of-hand — because it does not address broader fairness issues.
Critics’ main points
- Social imbalance: lower-income households would see little or no benefit.
- Favors the better-off: benefits concentrate among those already above median earnings.
- Doesn’t fix the ‘Mittelstandsbauch’: the tax structure’s middle-income squeeze remains.
- Fiscal risk: could deepen budget gaps unless financed by cuts or other revenue measures.
5. How could it be financed?
Proposals to make up the revenue shortfall range from spending cuts to revenue increases. Analysts have suggested several possible sources, but each comes with trade-offs for the broader economy or social services.
Possible financing options
- Cut subsidies: suggested savings include removing or reducing energy price support (estimated around €17 billion) or limiting company car tax privileges (about €7 billion).
- Increase consumption taxes: a higher VAT rate (for example up to 21%) has been proposed as one way to raise revenue, though this is regressive.
- Adjust top rates: raising the top rate for very high incomes (e.g., a 47% rate above a higher threshold like €97,000) could offset some loss while keeping the €80,000 threshold.
- Spending cuts elsewhere: politically difficult because many cuts hit social programs.
Risks and trade-offs
Financing the cut could shift costs onto lower-income households (via VAT) or weaken welfare and public services (via cuts). Raising other taxes on high incomes might be politically contested and could still leave budget shortfalls. Analysts warn that poorly designed offsets could undermine the social safety net or deepen fiscal holes over the medium term.
6. What can taxpayers do?
If you are affected or concerned, there are practical steps to consider. Public debate and elections determine whether such proposals become law, and personal tax planning can mitigate timing effects if rules change.
- Ask candidates and representatives where they stand on the proposal and financing—voters can push for clarity.
- Consult a tax advisor: consider legal timing of income, such as deferring bonuses, severance payments, or pension starts if allowed, to optimize tax outcomes.
- Follow legislative developments: changes to thresholds, rates, or financing measures may alter the final picture.
- Weigh broader impacts: think about fairness and public services when forming a position or voting.
7. Conclusion
The CDU’s proposal to move the top tax threshold to €80,000 is simple to state but complex in effect. It would give modest relief to some higher earners while costing the state billions and raising questions about fairness and financing. Voters, affected taxpayers, and policymakers must weigh the distributional effects, fiscal trade-offs, and alternatives before any final decision is made.
