Background: Merz’s original promise and the emerging shift
Friedrich Merz entered the 2024/2025 campaign and subsequent coalition negotiations with a clear and repeated promise: no tax increases. The coalition agreement included the line ‘Die Steuern nicht erhöhen’, and in a public interview on 31.08.2025 Merz stated plainly, ‘Steuererhöhungen werde es mit ihm nicht geben.’ These commitments shaped expectations about fiscal policy and reassured voters concerned about higher taxes.
Key statements and timeline
- 31.08.2025: Public interview in which Merz reaffirmed that there would be no tax increases under his watch.
- 18.02.2026: Earlier messaging emphasized fiscal limits with the remark ‘Die Zitrone ist ausgequetscht’, suggesting little room for more taxation.
- 25.03.2026: Merz said ‘Wir schließen nichts aus’ on the question of changes to value added tax, indicating that some options were no longer categorically ruled out.
- 16.04.2026: A journalist reported that Merz might be open to raising the top marginal tax rate and a higher tax on the very wealthy to fund billions in revenue, even while planning other targeted reliefs.
In 2026, however, reporting and statements from political insiders point to a possible change. New accounts suggest Merz may be open to targeted tax increases on high incomes to generate substantial revenue, while at the same time supporting relief measures for lower incomes and temporary consumption tax reductions. This apparent shift has prompted questions about consistency and political trade-offs.
Possible tax measures under consideration
Reports focus on a narrow set of measures that could both raise revenue and preserve relief for lower- and middle-income households. The debate centers on who should bear additional burden and which instruments are politically acceptable for the governing coalition.
Top marginal tax rate and higher rate for very high incomes
- Discussions include raising the top marginal tax rate from 42% to about 45% to increase receipts from high earners.
- There is talk of a so-called ‘rich tax’ or Reichensteuersatz around 47–48% for the very highest incomes to generate billions.
- The approach would be targeted rather than broad-based, aiming to preserve promised reliefs for lower-income groups.
Value added tax and other options
Merz’s comment on 25.03.2026 — ‘Wir schließen nichts aus’ — signaled that changes to value added tax (Mehrwertsteuer) were not completely off the table. Other options under discussion include selective temporary measures or reprioritization of spending rather than permanent broad tax hikes.
Coalition dynamics and planned reliefs
The government is weighing reliefs alongside possible revenue measures. Planned steps include a temporary cut in the mineral oil tax by 17 cents per liter to ease fuel costs and a tax reform aimed at benefiting lower incomes starting in 2027. These moves show an intent to shield ordinary households from pressure while addressing budgetary needs.
Internal conflict points
- Übergewinnsteuer (overprofit tax): Merz has opposed an overprofit tax, while the finance minister from the coalition partner insists on keeping it on the agenda, creating a clear division.
- Timing and trade-offs: Relief measures like the temporary fuel tax cut require financing. The choice between broad austerity, targeted increases on top incomes, or other revenue sources is a source of tension.
- Public promises vs. fiscal reality: Former categorical promises against any tax hikes collide with mounting fiscal pressures and differing policy priorities within the coalition.
Reactions: critics, opposition, and public response
Critics accuse Merz of backtracking on his earlier vows, calling the change a breach of trust. Phrases from earlier statements, such as ‘Die Zitrone ist ausgequetscht’, are now scrutinized as political rhetoric that may be revised in the face of financial realities. Opposition parties have reacted differently: some demand tax cuts instead of increases, arguing relief should come from lower rates, not higher ones for top earners.
Political implications
Any move toward higher top rates or a wealth surcharge could reshape the political debate. It could soothe budgetary shortfalls and fund popular reliefs, but it also risks alienating voters who took earlier promises at face value and could intensify strains within the governing coalition. The outcome depends on negotiation, public messaging, and how compromises align with declared principles.
What to watch next
Key items to monitor in the coming weeks and months include formal proposals on top-rate adjustments, decisions about the overprofit tax, the design and timing of the tax reform for lower incomes in 2027, and any temporary measures such as the mineral oil tax cut. Negotiations within the coalition will determine whether policy moves are framed as necessary fiscal adjustments or a departure from earlier promises.
Takeaway
Friedrich Merz’s stance on taxes appears to be shifting from categorical refusal to a more flexible, pragmatic approach focused on targeted measures. The debate balances fiscal needs, fairness, and political credibility. For citizens and observers, the crucial questions are which groups will be asked to contribute more, how relief for others is secured, and whether the coalition can hold together under the strain of competing priorities.
