Overview
- The Civey survey of 5,000 adults conducted August 12–14 found 62 percent of respondents view an automatic legal fix for kalte Progression positively, 18 percent negatively, and 20 percent undecided.
- The FDP, led publicly by General Secretary Martin Hagen, is pushing a law to automatically tie tax-bracket thresholds and the basic tax allowance to inflation and is highlighting its February four-step tariff (15/25/35/42 percent) as part of its plan.
- Critics say Finance Minister Lars Klingbeil’s current tax-reform draft omits automatic indexation and that the gap could act as a hidden tax rise that costs some households up to about €500 per year according to published calculations.
- Kalte Progression happens when wage rises that only match inflation still push taxpayers into higher brackets, which lowers real take-home pay unless thresholds are adjusted for price increases.
- The poll has sharpened a political fight inside the governing coalition over whether to write indexation into law, a step supporters say would remove year-to-year ministerial discretion that has previously eased cold progression under past finance ministers.