The probing was successfully completed and everyone wins – somehow. The Union? can continue to reign. The CSU? Gets tightening in refugee policy. The SPD? Guarantees considerable concessions on subject of economics and social Affairs.
You have read correctly: The Social Democrats have prevailed in some crucial points, even if no new taxes are introduced for top earners, as leading comrades had previously called for.
But re are no tax cuts, and because tax revenues are likely to increase, this means that state will receive significantly more money that it can spend on investment. The exploratory paper already provides for more expenditure in amount of 36 billion euros for families, schools, housing or development aid – and because estimates made so far on development of tax revenue in view of booming Economy is likely to be too pessimistic, scope for distribution will increase in course of legislature.A few negative surprises
On top of that, SPD has to pay off waiver of higher taxes for peak earners expensive. It is foreseen that solidarity surcharge for very high income earners will be maintained permanently, instead of being phased out as planned in next year. All or workers, on or hand, are relieved if y pay solidarity surcharge (which does not apply to low-income earners, but which should at least be relieved from social contributions). In concrete terms: those who earn less than about 60,000 euros a year will no longer pay soli. If you earn more, you continue to pay for it – full sentence. This is nothing more than a hidden tax increase for rich.
If Economist Clemens Fuest of Munich Ifo Institute writes that government program "brings a permanent extension of state's share in economic performance, i.e. higher taxes and more public services", n that is exactly what SPD leadership needs , which must convince skeptical base that social democratic principles are not thrown overboard in formation of a new grand coalition.
And what does exploratory result mean for country? It suggests a continuation of a moderate social democratic policy under leadership of a Union chancellor with some positive (a new Africa policy, a basic pension, Europe) and some negative (climate targets, mors duck) surprises.
Nothing that inspires imagination, but a foundation for four years of solid governance.
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