BSW on finance and taxes

The BSW wants to reorder the financial relationship between the state and its municipalities. Cities, towns and counties are to be funded adequately and according to need and decide on their own spending. The effort involved in grant funding is to be reduced.

Towns and cities in Saxony should get enough money. The money should match what they need. They should decide for themselves how to spend it. Today they often have to apply for grants with a lot of paperwork. The BSW wants to make that simpler.

The platform justifies the reform by noting that municipalities depend heavily on taxes that rise and fall with the economy, such as business, sales and income tax. It says infrastructure is crumbling, voluntary services are being cut and some municipalities can barely meet their mandatory duties. The party wants to change the fact that the state steers municipalities through decisions on grants. The benchmark should be actual local need rather than whether a grant program happens to exist. This is meant to strengthen local self-government.

The BSW wants to change Saxony's Finanzausgleichsgesetz (fiscal equalization act) so that every municipality can draw up a balanced budget. A fund should help municipalities buy back public service facilities they sold.

Many towns in Saxony do not have enough money. The BSW wants to change the law that shares out the money. Towns should get enough for their tasks. A fund should help them buy back sold hospitals or housing. The new property tax should not cost citizens more.

The reform should be worked out with the Saxon associations of cities, towns and counties. The program cites a deficit of 342 million euros for cities and municipalities at the end of 2023 and criticizes that the current law does not require allocations to be sufficient. The new property tax should be revenue-neutral for residents, without disadvantages for municipalities. Funding programs should be reviewed and simplified. Child and youth work, culture and sports should get reliable long-term funding instead of amounts that change every year.

The BSW wants to change the debt brake in Saxony's constitution so that borrowing for public investment is possible again. The pandemic-era loans should be repaid over a much longer period than eight years.

The debt brake bans almost all new debt for Saxony. The BSW wants to change that. The state should be allowed to borrow for investments. Saxony should pay back its Covid loans more slowly. There should be no new budget cuts.

The program calls the debt brake in its current form, which also covers investment, a brake on development. Under the existing rule, the budget may in principle contain no revenue from loans; the state parliament decides on exceptions, and repayment must happen within eight years. According to the BSW, this narrows already tight budgets during the repayment years. The party rejects cuts made only to meet a savings target. It wants to tackle infrastructure deficits while still pursuing sound fiscal policy.

The BSW wants Saxony to launch a Bundesrat initiative for a wealth tax on very large fortunes. The revenue would go to the states and, according to the program, could be spent on education, hospitals and school buildings.

The BSW wants a tax on very large fortunes again. Multimillionaires and billionaires should pay it. Saxony should propose this in the Bundesrat. The money goes to the states. They can use it for schools and hospitals.

The program cites a study by the Netzwerk Steuergerechtigkeit (Tax Justice Network Germany). It says the state could collect 73 billion euros more per year if the wealth of the richest were taxed as in Switzerland. The tax is meant to apply only to multimillionaires and billionaires.

The BSW wants to push at the federal level to abolish Grundsteuer A, the property tax on agricultural and forestry land. It rejects additional burdens on farmers such as the cuts to farm diesel relief.

Farmers pay a tax on their land. It is called Grundsteuer A. The BSW wants to end this tax. Farmers should also keep getting cheaper diesel.

The party argues that the tax creates more administrative work than it raises in revenue. It opposes the federal government's decision to cut the farm diesel tax break and wants to keep that relief. As further conditions that only the federal parliament or the EU can set, the program names stable prices and protective tariffs on certain farm imports.