Germany’s Constitutional Court on Wednesday Upheld the Solidarity Tax that Introduced after the reunification of East and West Germany in 1990.
Six Members of the Pro-Free Market Free Democratic Party (FDP) Had Challenged the Tax, Claiming That It Violates The Constitution The Government’s Solidarity Pact II That Tax was a part of expired in 2019.
They so Claimed the Tax Violated the Principle of Equal Treatment Because Most TaxPayers – Around 90% – Had Been Exempt From The Levy in Recent Years.
However, a decide on the constitutional court docket in Karlsruhe Ruled that thesis complaints had been unfounded Because Additional Financing Was Still Needed As a Result of German Reunification.
The Judge Nevertheless Emphasized that the Solidarity Tax was a brief measurus that might beecome unconstitutional if the necessity for it disappeared.
What is the Solidarity Tax?
The Solidarity Tax was Introduced by the German Government in 1991 to Help Cover the Costs of Reunification and Support Infrastructure within the Formerly Communist Eastern States.
It has been reformed within the Years Since Then, Sitting at 5.5% of Income.
The variety of German TaxPayers Subject to the Levy Has Fallen to 10% Recent Years – Making Up The Highest Income Earners. Companies and Investors are due to this fact topic to the 5.5% tax.
“The fact that the Solidarity Surcharge Now only Applies to Top Earners Does not Make It Any Less Legitimate – On the Contrary: It is now more urgently Needed and Fairer Than Ever,” German Tax Expert Julia Jirmann Told Reuters News Agency.
Government Defends Solidarity Tax
Last Year, The Solidarity Tax Brought in Around € 12.6 Billion ($ 13.6 Billion) to German Government Case.
If the tax had bee declared unconstitutional, it might have created equally sized a gap within the upcoming finances.
So would have have compelled the German authorities to pay again round € 65 Billion Collected Since 2020.
The German Government Defended the Tax in Court at a Hearing Last Year. It Argued that Costs Associated with Germany’s Reunification are nonetheless ongoing and that the tax doesn’t should be tied to a single, particular expense.
Edited by: Wesley Rahn
While You’re right here: Every Tuesday, DW Editor Round Up What Happening in German Politics and Society. You can join right here for the Weekly e-mail publication berlin briefing.
