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4w ago

German Court Upholds Solidarity Surcharge as Constitutional

The Federal Constitutional Court rules the surcharge remains justified due to ongoing reunification costs but mandates periodic reassessment.

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Karlsruhe hat gesprochen: Die Verfassungsrichter Holger Wöckel, Thomas Offenloch, Rhona Fetzer, die Vorsitzende Christine Langenfeld, Astrid Wallrabenstein und Peter Frank (v.l.)
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Overview

  • The Federal Constitutional Court has declared the solidarity surcharge constitutional, rejecting a challenge from six former FDP politicians.
  • The court emphasized that ongoing financial burdens from German reunification justify the surcharge's continuation, citing expert findings on structural disparities persisting until at least 2030.
  • Introduced in 1995, the surcharge generates approximately €12-13 billion annually and is paid by around 10% of taxpayers, including high earners and corporations.
  • The ruling requires the federal government to periodically reassess whether the surcharge remains necessary to address reunification-related financial needs.
  • While the decision secures a significant revenue source for the federal budget, it also reignites political debates over tax equity and economic policy in Germany.