Overview

• Markus Söder said on ZDF he will push regionalizing the tax at Wednesday’s coalition committee meeting, arguing for tax competition and pledging to halve Bavaria’s rates.
• Chancellor Friedrich Merz rejected the push for now, citing no Länder consensus and noting any change to the federal law would also require Bundesrat approval.
• Marie-Christine Ostermann, president of the Familienunternehmer association, called for abolishing the tax on businesses in East German states to bolster weak equity positions.
• Ostermann warned state-by-state rules would create a 16-part patchwork and heavy bureaucracy for firms operating across multiple states, while pointing to Austria’s lack of an inheritance tax as a competitive factor.
• The fiscal backdrop remains tight, with Finance Minister Lars Klingbeil not ruling out higher taxes on top earners to help close a projected 2027 budget gap exceeding €30 billion.