Employees experience a net gain in 2021.
In a significant move, the German government has announced that the solidarity surcharge will be abolished for the majority of taxpayers starting from the new year. This tax, which currently stands at 5.5%, will no longer be immediately due in full when the allowance is exceeded, but will instead increase gradually until the full rate is reached.
For around 90% of taxpayers, this means a significant reduction in their tax burden. Low-income employees with a monthly gross salary of 2,000 euros will only see an additional 18 euros per month, while single high earners in the first tax bracket with a monthly gross salary of 6,000 euros will see an additional 1,083 euros per year. Married high earners with a monthly gross salary of 9,000 euros will see an annual increase of 1,346 euros.
However, the tax savings will decrease again once income thresholds of 6,500 euros for singles, 7,500 euros for single parents, and 11,000 euros for married couples are reached. The solidarity surcharge will still apply in a reduced form for income above these thresholds.
The federal finance minister, Olaf Scholz, has stated that these changes will leave more money in people's pockets, helping to keep the economy going and secure jobs. The FDP budget expert, Otto Fricke, has approved of the chosen approach, emphasizing the importance of targeted relief over a senseless reduction of value-added tax this year.
In addition to the abolition of the solidarity surcharge, other legal changes have been taken into account. These include an increase in the tax-free allowance and an increase in the child allowance. As a result, taxpayers are expected to have approximately 17 billion euros more in their pockets in 2021 due to these relief measures and the 15-euro increase in child benefit.
The Union faction's budget expert, Eckhardt Rehberg (CDU), has also supported the tax package, stating that the abolition of the solidarity surcharge after 30 years is overdue for almost everyone. It's worth noting that 85% of investments in Germany come from private individuals, according to Otto Fricke.
In conclusion, the abolition of the solidarity surcharge is expected to provide significant financial relief for the majority of taxpayers in Germany, boosting the economy and helping to secure jobs. The changes are part of a larger package of relief measures designed to support individuals and businesses during these challenging times.
Read also:
- Catastrophe at a U.S. Steel facility in Pennsylvania results in the loss of two lives. crucial details unveiled
- Manipulating Sympathy: Exploiting Victimhood for Personal Gain
- Prices remain a concern for the Germans
- Auto Industry Updates: Geotab, C2A, Deloitte, NOVOSENSE, Soracom, and Panasonic in Focus
