We want to "green" Germany's tax policies and make the tax system simpler, more equitable and sustainable.
How can we overcome the financial burdens resulting from the financial and economic crisis, and who will ultimately pay the bill? This is an issue of real concern to many citizens. We Greens know that we cannot leave this massive burden as the legacy for future generations. That is why we are opposed to tax cuts that are based on borrowing. But it would also be wrong to expect everyone to cover these costs through general tax increases. Our principle is that those with greater capacities must take on more of the burden, and that the weaker members of society should pay less.
No one likes paying taxes. That is why it is important that citizens understand and accept the tax system. The tax rules must be clear, comprehensible and easy to apply. We want to remove the many anomalies and exemptions in tax law and integrate all income into the tax base on an equal basis. When it comes to filling in tax declarations, too, the rules must be clear and straightforward to make the process easier.
The tax system can only generate enough revenue for the sustainable financing of public expenditure – education and environmental protection, schools, universities, hospitals and elderly care homes – over the long term if it is accepted by the public. Sustainable tax law also means that ecologically sound behaviour is rewarded and climate crimes are penalised.
And finally, the tax system will only be accepted if it is seen as fair. Our aim is therefore to achieve more equitable burden-sharing. This is an essential prerequisite for a well-functioning tax system. Citizens need to know that their neighbours are not receiving any preferential treatment that cannot be justified. Their own willingness to pay their honest share will then increase.
Fair income tax
We want to reform the income tax system to make it more equitable. The basic personal allowance should therefore be increased to 8,500 euros and should be regularly reviewed in order to curb the effects of "fiscal drag". Further simplification of the system will be achieved with a standard allowance for income-related expenses, amounting to 2,000 euros. We want to increase the top rate of tax to 45 per cent through a linear extension of the tariff, so that more of the tax burden rests on the strong, not the weak.
Fair taxes for families
We want to simplify the complex system of family tax relief and benefits.We are proposing an independent and unconditional basic income for all children. To fund this system, income splitting for married couples will be developed into a system of personal taxation with a transferrable maximum amount. This will create a more equitable system for everyone.
Sustainable business taxes
Promoting small and medium enterprise is a priority for us. This means making small and medium businesses more resilient to crises: tax-free retention of profits – up to 10,000 euros for each employee paying social insurance contributions, to a maximum of 250,000 euros per SME – will help companies safeguard jobs that are liable for social insurance. With a tax credit of15 per cent for research and development expenditure (R&D) for companies with up to 250 employees, we want to help SMEs develop new products and processes. This will create a more robust economy and a sustainable tax base. We intend to expand trade tax into a local business tax, which will enable us to remove the highly complex rules on the limitation of interest deduction for corporate tax. This will simplify the system, lead to fairer burden-sharing in the business sector, and create a more viable tax base for the future while substantially reducing opportunities for tax avoidance. Low-value assets of up to 1,000 euros should be deductible immediately, thereby reducing red tape for small businesses and the self-employed.
We want a radical shape-up of inheritance tax and gift tax with new rules that are appropriate for today. We see the reform of inheritance tax as a justice issue. There should be a single tax group and a single tariff. Surviving partners from registered partnerships should be treated equally with spouses. We want a far higher tax-free allowance for small and medium businesses, so that family-owned companies are not burdened by high tax bills which put their survival at risk. Additional tax receipts generated by inheritance and gift tax should be invested by the federal states (Länder) in improving education and childcare facilities.
The strong, rather than the weak, should shoulder more of the responsibility for overcoming the financial and economic crisis. This purpose will be served by the introduction of a one-off time-limited levy on propertyunder Article 106 of the German constitution, the Basic Law. This will go towards meeting the costs of the crisis with ring-fenced funds. The revenue from this levy accrues solely to the Federation. The relevant provisions were incorporated into the Basic Law for the specific purpose of meeting extraordinary burdens.
"Greener" taxes for the environment
We want to develop the ecological fiscal reform in tax law as well. We put forward specific proposals on this issue during the last electoral term, which included the introduction of a CO2-based vehicle tax and more effective taxation of company cars. We want to develop the commuter allowance into a mobility supplement for all employees, irrespective of income. We want to end the tax-free status of aviation fuel and introduce an air ticket levy. The VAT exemption for the domestic element of international flights should be scrapped, and a reduced VAT rate should apply to long-distance rail travel. We intend to introduce a nuclear fuel rod tax similar to the fossil fuel tax. We will scrap exemptions to the eco-tax and abolish taxes on renewables-generated electricity. And as the final item on our agenda, we plan to make real property tax more ecological and thus increase the incentives for sparing use of land.