Ifo Institute: Economists demand tax relief

 

Author: FinanceScout24 – Published on 03.05.2017

If it were the majority of German economists, taxes would have to fall significantly. This is the conclusion of a survey by the Munich Institute for Economic Research ifo. Especially in the field of middle income economists see the burden too high. Federal Finance Minister Schäuble, on the other hand, recently described taxes as low.

While the tax burden is rather low, according to Federal Finance Minister Wolfgang Schäuble, economists argue for significant reductions. According to a survey by the Munich Institute for Economic Research (ifo), the majority of German economists are calling for tax relief. Taxes are particularly high in the field of middle incomes.

Demand for less fees

 Demand for less fees

The Institute for Economic Research in Munich has interviewed 110 German economists together with the “Frankfurter Allgemeine Zeitung”. In this survey, the majority of economists favored tax cuts. The burden on middle-income households was rated as “too high” by 60 percent of respondents. More than 61 percent demanded lower burdens for all taxpayers. The solidarity surcharge, which the majority voted for without replacement, turned out to be particularly unpopular. Only one in four economists sees no need for action in the tax situation of the Germans.

For a third of respondents from the economics panel, the ideal annual relief volume is around 20 to 30 billion euros, for a quarter of them 10 to 20 billion. The most popular was the flexible income tax, which is adjusted according to the inflation. After all, three quarters of the experts advocated this “tariff on wheels”, which would end the cold progression. In this case, taxpayers slip into ever higher tax rates due to rising income taxes and inflation rates – without any increase in their own purchasing power.

Too little or too much?

 Too little or too much?

When calls for tax cuts were made at the beginning of the year, Federal Finance Minister Wolfgang Schäuble had announced annual relief of 15 billion euros. But this weekend seemed to forget the statement, which was replaced in an interview by the diagnosis of too low a tax burden. Schäuble’s assessment is in direct contrast to the majority of the Ifo survey.

But for Niklas Potrafke, head of the Ifo Center for Public Finance and Political Economy, there is also the question of financing a reform. While a majority of economists in the survey, the middle class overreaches seen, spoke only one in six economists for a reduction in the top tax rate. However, the broad majority considers the threshold of 54,000 euros annual income to be too low.

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