German chancellor cautions against raising taxes on high-income individuals

German Chancellor Friedrich Merz has strongly criticised the Social Democratic Party of Germany’s (SPD) plans to raise taxes on high-income individuals.

Speaking on the Machtwechsel podcast, Merz stressed that the current tax burden on many high earners is already approaching its practical limit, reaching nearly 50% in some cases.

“We really cannot do more. The lemon is almost squeezed,” he said, using a vivid metaphor to underline the limits of further taxation.

The CDU plans to discuss measures at its upcoming party congress in Stuttgart that would adjust the top tax rate so that it applies only to higher income brackets than at present. This would effectively ease the tax load for some wealthy taxpayers. CDU Secretary General Carsten Linnemann has proposed raising the threshold for the 42% income tax rate from the current €68,481 to €80,000 per year.

The SPD, however, continues to push for higher rates targeting the wealthiest taxpayers. Currently, the 42% top rate applies to single taxpayers earning €68,481 and above, while a 45% rate, sometimes called the “rich tax,” applies to those earning over €277,826.

Merz cautioned that increasing taxes further would burden millions of entrepreneurs who pay personal income tax, warning of potential negative impacts on business and economic activity.

“I strongly advise that we do not increase their tax burden any further,” Merz added, emphasising the need to balance tax policy with economic sustainability.

By Tamilla Hasanova