FDP on finance and taxes

The FDP rejects any loosening of the debt brake and wants to repay the state's COVID debt faster than legally required. It cites fairness between generations and readiness for future crises.

The state took on a lot of debt during COVID. The FDP wants to pay this debt back quickly. The debt brake should stay strict. The debt brake is a rule against new debt. Young people should not carry the burden for long.

The permitted repayment period of 50 years should not be used in full if possible, especially as tax revenue is expected to rise. Where planned investments were brought forward and paid from the special fund, the ministry that benefited is to make matching savings later. The use of money from the COVID rescue fund is to become more transparent. Future burdens such as civil servants' pensions are to be shown more clearly in the budget.

The FDP rejects tax increases because, in its view, they endanger the economic recovery. Subsidies are to expire automatically, and the state budget and all funding programs are to be reviewed critically.

The FDP does not want higher taxes. It says higher taxes hurt the economy. State aid for companies should end after a fixed time. The state should check all spending closely.

Revenue is to rise through post-pandemic growth rather than higher taxes. Before extending a subsidy, the state government must review it. For every funding program, the goal, instrument and criteria for measuring success are to be set in a binding way. A digital platform is to list all state funding programs with their criteria and application process. A report on finances that are fair across generations is to be published every year.

The FDP wants to review all state-owned enterprises and holdings and sell whatever is not of overriding public importance. This includes the stakes in the Düsseldorf and Cologne trade fair companies; more privatization is also planned at the state's building and real estate agency.

The state owns shares in companies. The FDP wants to check all of these shares. Anything that is not very important for the public should be sold. This includes the shares in the trade fairs in Düsseldorf and Cologne.

Stakes in private companies are to be tied to binding criteria, such as a clearly defined state policy goal. They should not distort competition and should generally be temporary. The trade fair stakes are to be sold after the pandemic and in agreement with the two cities. At the BLB NRW, the FDP sees too little effect from past reforms and wants to reorganize office space management and building procurement. Public investment is to complement private investment in a targeted way rather than being expanded across the board.

The FDP wants North Rhine-Westphalia to adopt its own property tax model based on land and building area plus location factors. It rejects the federal model, which in its view creates heavy bureaucracy and leads to automatic tax increases as property values rise.

The FDP wants a separate property tax for North Rhine-Westphalia. The tax should mostly depend on the size of the land and building. The value of the property should matter very little. This way the tax should not keep rising on its own.

The platform calls this a property tax brake. The state should use the opt-out clause for states, as other German states have already done. Without a decision, the federal model applies from 2025, under which market values are reassessed every seven years. The FDP expects this to raise the burden unless municipalities actively lower their local rates. In its view, the property tax must not work like a wealth tax, and tenants and owners have little influence on local price trends.

Municipalities should decide for themselves whether to charge a special rate on plots that are ready for building but left undeveloped. The FDP attaches the condition that the extra revenue be used entirely to lower the regular property tax (Grundsteuer B).

Some plots of land may be built on but stay empty. Towns can charge a higher tax for them. The FDP wants to let towns decide this. In return, towns must lower the normal property tax.

Federal law lets municipalities set a special rate for undeveloped building plots, known as Grundsteuer C. The FDP wants to allow this tool as part of local self-government so that towns can manage their land. The condition is that Grundsteuer B falls by the same amount. This is meant to relieve residents and businesses.

The FDP wants to continue the fight against tax evasion and allow the seizure of assets whose origin clearly cannot be explained. It also wants to work for a fair distribution of the tax burden between small businesses and multinational corporations.

The FDP wants to keep fighting tax fraud. The state should be able to take away wealth if nobody can explain where it came from. Big corporations should not dodge taxes. Small firms should not carry more of the load than big ones.

The platform points to a cross-ministry task force of IT specialists, police, prosecutors and tax investigators against international financial crime. In cum-ex cases, more staff should make sure that as few offenses as possible go unpunished. The FDP rejects aggressive tax avoidance by large corporations because they also use infrastructure, the rule of law and skilled workers. It argues that a low tax burden for everyone is only possible if no one evades taxation.

The FDP wants to raise the municipalities' share of state revenue from 23 to 25 percent over the longer term. More of the money is to flow as lump sums, while the state's many grant programs are reviewed.

Cities and towns should get more money from the state. Their share should rise from 23 to 25 percent. They should decide for themselves how to use it. The FDP wants to review the state's grant programs.

According to the platform, municipalities should be able to carry out their tasks on their own strength and set their own priorities. Lump sums are meant to give more leeway, especially for schools and education. The FDP wants to adapt the division of school funding between state and municipalities to digitalization, in dialogue with the municipal associations. The municipal financing law is to be checked regularly to see whether it reflects municipalities' fiscal strength realistically.

The FDP wants to abolish the Gewerbesteuer (local trade tax) in the long run and give municipalities a larger share of value-added tax instead. Municipalities are to be allowed to set their own rates on further taxes and, in return, be bound by a debt brake.

The FDP wants to end the local trade tax in the long run. That is a tax companies pay to their city. Cities should get more of the sales tax instead. They should also set their own rates on other taxes. In return, they should take on less new debt.

The platform justifies the replacement by saying the trade tax swings heavily with the economy and tears holes in budgets during recessions. The local rates are to apply to corporate, wage, and income tax. This is said to strengthen self-government and make it clearer to citizens and businesses what they are paying for. The municipal debt brake is meant to lead to sustainable budgets over time and is justified with fairness between generations.

The FDP wants to support over-indebted municipalities with credit assistance based on the principle of helping them help themselves. Each municipality is to remain liable for its own debt; the party rejects pooling the debts.

Some cities have very high debts. The FDP wants to help them manage these debts. But each city should stay responsible for its own debt. Others should not take over the debt. A supervisor should warn early about new debt.

The FDP wants to build on the "Stärkungspakt Stadtfinanzen" (a state aid pact for city finances) and work alongside the new federal government's plans. The state is to provide professional debt management. Municipalities that take part in a solution should not be able to run up new debt through short-term cash loans. To that end, municipal oversight is to be strengthened and act as an early warning system.

The FDP wants to completely abolish the road improvement charges that have already been halved. This is meant to free property owners and buyers from a cost risk and reduce red tape; municipal fees are also to become easier to compare.

Homeowners often have to pay when their street is renewed. The FDP wants to end these charges completely. This should relieve owners and buyers of homes. City fees should also be easier to compare.

In road building, maintenance is to take priority over later upgrades; for this, the state and federal governments are to put municipal finances on a sound footing. Road construction standards are to be reviewed to give municipalities more freedom. For charges on first-time development of a street, the FDP wants a legally secure limitation period. For fees such as wastewater, benchmarks, municipal oversight, and the municipal audit office are to ensure comparability, and more cooperation between municipalities is meant to lower costs.