Germany's Commuter Tax Allowance Faces Calls for Reform in Coalition Talks

The CDU and SPD are considering further increases to the policy, which benefits millions but is criticized for its cost and environmental impact.

Nearly 14 million employees in Germany utilized the commuter tax allowance in 2020, with middle-income earners being the primary beneficiaries.
Current coalition negotiations between the CDU and SPD are discussing potential increases to the allowance, which was last reformed in May 2022 to 38 cents per kilometer for distances over 21 kilometers.
Economists and the OECD criticize the policy as expensive and environmentally harmful, citing high car dependency among commuters.
Data shows 84% of commuters used cars for at least part of their journey in 2020, with rural residents more reliant on cars than urban dwellers.
The allowance can be claimed regardless of transportation mode, but its environmental impact raises concerns as Germany pursues climate goals.