Overview
- The leaked Referentenentwurf, obtained Monday by multiple outlets, calculates roughly €3 billion in tax relief for 2027 and about €7 billion for 2028 rather than the single‑year figure many expected.
- After sharp public and political criticism, Finance Minister Lars Klingbeil said he would remove the proposed cut to the tax allowance for certain taxable associations from the draft.
- Core measures in the draft aim to help families and lower‑ and middle‑income earners through higher child benefits, a raised basic tax‑free allowance, and a larger Arbeitnehmer‑Pauschbetrag.
- The draft would raise taxes on very high incomes by adding a 47% rate above €280,000 and shifting the 45% rate to €250,000, while offsetting relief by cutting some deductions and benefits.
- The document lacks an automatic correction for 'kalte Progression' — inflation‑driven bracket creep — a point heavily criticised by unions, the taxpayer association and opposition parties, and the draft still needs inter‑ministerial sign‑off, cabinet approval and Bundestag votes before it can change.