Overview

• The federal government’s economic package includes expanded depreciation rules and a phased cut in the corporate tax rate from 15 percent to 10 percent by 2028 to stimulate growth
• The proposed relief is forecast to reduce public revenues by roughly €46–48 billion, with states and municipalities shouldering about two-thirds of the shortfall
• Saxony’s Michael Kretschmer and Lower Saxony’s Olaf Lies invoke the coalition’s “whoever orders, pays” clause and will press for full federal compensation at the June 18 meeting
• Economists such as Achim Truger caution that the tax measures may deliver limited growth benefits and could undermine municipal investment capacity
• Meanwhile, Labor Minister Bärbel Bas has renewed calls for pension reform by extending mandatory contributions to civil servants and other currently exempt groups