Carsten Linnemann, the Secretary General of the Christian Democratic Union (CDU) in Germany, has proposed significant tax reforms aimed at providing relief for higher incomes. He suggests that the top income tax rate should not kick in until an annual gross income of 80,000 euros rather than the current threshold of 68,000 euros. This proposal aims to flatten the so-called ' Mittelstandsbauch', a term referring to the unique tax burden faced by small and medium-sized enterprises in Germany, and to alleviate the financial pressure on this segment of the population.

In addition to addressing concerns for higher earners, Linnemann is keen on providing relief for those with lower incomes by reducing secondary wage costs. He proposes moving back to a situation where the marginal tax rates hover around the 40 percent mark, noting that current trends point towards an increase to 45 percent. His comments on tax reform underscore the importance of ongoing discussions with the coalition partner, the Social Democratic Party (SPD), aimed at achieving effective social reforms that meet the needs of different income groups.

Moreover, Linnemann has expressed opposition to the idea of taxing capital income in addition to the existing source taxes with social contributions, a move seen as potentially burdensome for investors. His proposals highlight a push towards revising the current tax system to facilitate growth and support for Germany's Mittelstand, representing a critical segment of the economy. This discussion on tax reform is not just about numbers; it reflects broader concerns on how government policies can impact economic stability and individual financial freedom, especially in the context of coalition politics in Germany.