Citizen’s income, discounted energy prices and lower taxes for the poorest. Germany prepares for winter – A2larm

Citizen’s income, discounted energy prices and lower taxes for the poorest. Germany prepares for winter – A2larm
Citizen’s income, discounted energy prices and lower taxes for the poorest. Germany prepares for winter – A2larm

At the weekend, Germany’s triple coalition of Social Democrats, Greens and Liberals announced a third package to help households with rising energy, fuel and general inflation. Chancellor Olaf Scholz introduced him on Sunday after a long night of government meetings, saying: “Difficult times await our country. We won’t leave anyone alone, we’ll get through this winter.”

The first two waves of measures from the beginning of the year included, among other things, one-off contributions of 300 euros for each worker, 200 euros for benefit recipients and 100 euros per child. Fuel tax was also temporarily reduced and from June to August a ticket for regional trains and public transport was introduced, which could be used without restrictions throughout Germany for nine euros a month.

But the government has also announced that it will implement as quickly as possible the agreement that is emerging at the global level on a uniform basis for calculating corporate taxes.

The new package, with an estimated total value of 65 billion euros, now largely follows on from this. With a one-time contribution to the increased cost of living, they are thinking of 300 euros for originally neglected pensioners, while students will receive a hundred euros less. After the heated summer political discussions, the very successful discounting of fares should eventually continue soon in a slightly more expensive version ─ the debate is between 49 and 69 euros per month ─. In any case, the federal government has allocated one and a half billion euros for it, and it expects a contribution of the same amount from the individual federal states. In times of expensive fuel, mobility should also be made easier by increasing the contribution per kilometer of the journey to work, which is common for neighbors to deduct from their taxes.

Citizen income 500 euros per month

Households are also supposed to be relieved by the preferential price of electricity, for which they will receive a volume equal to “basic consumption”. The rules for the payment of housing support benefits will also be adjusted so that instead of the current 650,000 or so German households, up to 2 million of them will be entitled to them. For the period from September to December this year, all such households will receive additional bonuses. In the case of a one-person household, a one-time 450 euro, a two-person household 540 euro and for each additional person 100 euro. They should thus be able to cover the increased energy costs until the changed situation is already taken into account in the calculation of the benefit from January 2023. The disbursement should take place as little bureaucratically as possible, so that the money reaches the people as quickly as possible. At the same time, measures will be taken so that those who, despite using all the help, are not able to pay rent or fees, do not have to move out or have their electricity disconnected.

From the beginning of 2023, further changes in the benefit system are also expected. The child benefit, which is a blanket benefit for our German neighbors to which the parents of all children are entitled regardless of income, will be increased by 18 euros per month beyond the statutory valuation. Thanks to this, a family with two children will earn almost 400 euros more per year. A reform of unemployment benefits is also expected from January. The infamous Hartz IV system should be replaced by the so-called bürgergeld, i.e. “citizen’s income”, there was an agreement on this earlier. Now the government has announced that this will go hand in hand with a jump increase of this benefit by 50 euros to 500 euros per month. At the same time, housing for unemployed people is covered by another special benefit.

The package includes many other sub-measures, such as a reduction in levies for low-income workers and other changes to the income tax system to offset the negative effects of inflation. Tax relief is also planned for one-off contributions that would be used by employers to compensate their employees for inflation; reduced VAT for gas to seven percent or an increase in home office compensation up to 600 euros per year.

Will Germany survive the winter?

In addition to households, businesses are also considered. In addition to the above-mentioned levy reliefs, these are concerned, for example, with the extension of the kurzarbeit regime, if there is a need to temporarily interrupt operations. Help with increased energy prices is also planned for about nine thousand of the most energy-intensive businesses in the total amount of 1.7 billion euros.

The measures will be financed mainly from a new tax, which German politicians have started to call the “windfall tax”, which applies mainly to the energy sector. Until recently, it was referred to as a tax on “excess” profits. But the government has also announced that it will implement as quickly as possible the agreement that is emerging at the global level on a uniform basis for calculating corporate taxes. Some of them will need to be increased in Germany.

We will have to wait for a number of details of the announced package. Most of them remain to be resolved with the discounted ticket for public transport and the newly introduced taxes. It will also be interesting to see whether the other promised aid will be able to reach the people as quickly and unbureaucratically as the government promised. All in all, it will of course be exciting to see whether all of the above will be enough to see Germany through the coming winter without major problems, as Chancellor Scholz promises.

The author is a political scientist.

The article is in Czech

Tags: Citizens income discounted energy prices taxes poorest Germany prepares winter A2larm

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