CDU on finance and taxes

The CDU wants to push at the federal level for more tax relief for families. The tax allowance for single parents is to rise to 5,000 euros, and childcare costs of up to 6,000 euros are to be deductible.

The CDU wants families to pay less tax. Single parents should get a higher tax allowance. Parents should be able to deduct more childcare costs from their taxes. The federal government decides on this.

Both tax demands are aimed at the federal government: a 5,000 euro allowance for single parents and up to 6,000 euros in deductible childcare costs. Large families are to get more attention as a target group of family policy in their own right. The amount of family benefits is to depend more strongly than today on the number of children.

The CDU wants to reorganize the Kommunaler Finanzausgleich (state transfers to municipalities) following an evaluation and keep transfers at record levels. Municipalities are to get more leeway and fewer earmarked funds.

The state gives money to towns and counties. The CDU wants new rules for this. Towns should keep getting a very large amount. They should decide more freely how to spend it. Small, spread-out towns should get more help.

The fiscal capacity of municipalities and the burden on central cities are to be reassessed. A higher "sprawl factor" is meant to benefit small and scattered municipalities. The CDU wants to build on aid such as the Hessenkasse debt relief program, investment programs and the municipal rescue fund, while still seeing sound budgeting as a local duty. State-set standards that municipalities must implement are to be reviewed in dialogue with them. Budget advice for municipalities is to continue and be strengthened.

The CDU stands by the debt brake and wants to lower government spending as a share of the economy. Consumption spending and subsidies it considers inefficient are to fall, while investment in schools, digital government and infrastructure is to rise. All plans in the program are subject to available funds.

The CDU does not want new debt. The state should spend less money overall. More money should go to schools, digital offices and roads. All plans only apply if there is enough money.

The party justifies this with fairness between generations: no generation should consume more than it produces. Instead of across-the-board cuts, spending and tasks are to be reviewed. To fight inflation, budget policy is to be supply-oriented, meaning it should increase the supply of goods and services rather than prop up demand. The program notes that more than 70 percent of Hessians voted to put the debt brake in the constitution. Funding programs for municipalities are to become more flexible and less bureaucratic; before creating new application-based programs, the CDU will check whether a lump-sum payment fits better.

The CDU wants to keep the Länderfinanzausgleich (fiscal equalization among the states) but redesign it to create more economic incentives and competition between states. If talks fail, Hesse would join other contributor states in a new challenge before the Federal Constitutional Court.

Rich German states give money to poorer states. Hesse pays a lot into this system. The CDU wants to change the rules. If talks fail, it wants to go to court.

According to the platform, Hesse has paid in more than 60 billion euros over 70 years and received nothing. It argues that the current system does not reward recipient states for their own reforms and so locks in their weak finances. Aid should only come together with savings and reforms. The CDU also seeks a reordering of financial relations among the federal government, states and municipalities based on subsidiarity and on the principle that whoever assigns a task pays for it.

The CDU rejects additional caps on cash payments as well as any end to cash. It holds this position even as more people pay without cash in everyday life.

Many people now pay by card or phone. The CDU still wants to keep cash. It also wants no new limits on paying with cash.

The platform acknowledges that digital payment is becoming more common in daily life. Even so, the CDU opposes further restrictions on cash payments. It rules out getting rid of coins and banknotes altogether.

The CDU wants a corporate tax reform under which retained profits are taxed at no more than 25 percent. It rejects further tax increases and any tax on wealth, and intends to take that position in the Bundesrat as well.

The CDU wants companies to pay less tax. Profits that stay in the company should be taxed at 25 percent at most. The CDU does not want higher taxes. It also rejects a tax on wealth.

The platform justifies the reform by saying German companies are taxed well above the OECD average and a recession is looming. The 25 percent cap on profits kept in the business is meant to strengthen investment and innovation. In the CDU's view, a wealth tax would hit income that has already been taxed and would endanger retirement savings and mid-sized businesses, because wealth is often tied up in firms or homes. More generally, the party wants a leaner state and relief for citizens.

The CDU intends to push at the federal level for inheritance and gift tax allowances to rise by a quarter. It also wants states to be able to shape inheritance tax themselves so that Hesse can align allowances with real estate prices.

People who inherit often have to pay tax. Part of the inheritance is tax-free. The CDU wants this part to be bigger. Heirs should not have to sell their parents' house. If needed, the CDU wants to go to court.

Allowances would rise by 25 percent nationwide. The CDU also calls for regionally different inheritance tax rates and, for Hesse, allowances that track real estate prices. The platform's reasoning is that heirs would otherwise have to sell their parental home because of the tax. If the federal government refuses an adjustment, the Federal Constitutional Court should decide as a last resort.

The CDU wants to enshrine in law the offsetting of bracket creep and seeks a special allowance for 2023 and 2024 for incomes under 60,000 euros. At the federal level it also wants childcare costs, club membership fees and blood donations to become tax-deductible.

When prices and wages rise, people often pay more tax. This is called bracket creep. The CDU wants a law to offset it. People earning under 60,000 euros should get an extra 1,000 euros tax-free. Childcare costs should also lower the tax bill.

In the platform's view, extra government revenue caused by inflation belongs to taxpayers. The special allowance would be 1,000 euros and apply to 2023 and 2024. Childcare costs would be deductible up to 6,000 euros, as would membership fees for nonprofit associations in principle. Making blood donations deductible is meant to encourage more people to donate regularly. The CDU also wants to keep the tax administration well staffed and pursue tax fraud consistently.