Overview
- Coalition leaders met at the Koalitionsausschuss on Wednesday to try to bundle tax, pension, health, labour and bureaucracy reforms before the parliamentary summer recess.
- Finance Minister Lars Klingbeil presented two concrete income‑tax options: a larger package worth about €25–28 billion that would give many households €800–€900 a year, and a smaller €17–18 billion variant with roughly half that relief.
- Both models raise levies on top earners by lifting the Spitzensteuersatz and expanding the higher 'Reichensteuer', and the bigger plan also relies on changes to the inheritance tax to close the budget gap.
- The Union (CDU/CSU) objects to key pay‑fors — especially raising the Spitzensteuersatz and altering the Erbschaftsteuer — making agreement on the tax element the main obstacle to a full deal.
- The coalition has largely accepted the Rentenkommission pension recommendations, while health, care financing and labour‑market flexibilisation remain unresolved and a failure to agree could delay the whole package and complicate the 2027 budget.