SPD on finance and taxes

The SPD wants to support company investments in machinery and equipment with a tax refund of 10 percent of the purchase price. It rejects across-the-board tax cuts for all companies and relies on targeted incentives.

Companies should invest more in Germany. If a company buys machines or equipment, it gets 10 percent of the price back. The money comes through its taxes. The SPD does not want a tax cut for all companies.

The bonus would apply to existing businesses and to new arrivals and cover all equipment investment. The platform argues that traditional funding programs often take a long time and create a lot of red tape. It cites an energy-efficiency bonus in the Wachstumschancengesetz (Growth Opportunities Act) as a precursor. Regional funding programs such as GRW and GAK are to continue.

The SPD wants to change the debt rule in the constitution so the state can borrow more for investment. It says today's rule does not fit current challenges, and that paying for long-term investment with credit spreads costs fairly across generations.

The debt brake limits new government debt. The SPD wants to change this rule. The state should be allowed to borrow more money to invest. For example in schools, railways and defense. The states should also be allowed to borrow.

The plans include exceptions for future-oriented investment, a more flexible deficit rule and an updated economic-cycle component. The states are to get their own borrowing options, all within the European fiscal rules. The emergency rules are to be changed so the state can act across several years, and repayment duties after emergencies are to be revised. Financial transactions, such as equity for public companies, are to be used more. The SPD rules out privatizing infrastructure.

The SPD proposes a pact between the federal government, states and municipalities to give all levels more fiscal room for investment. A solution is to be found for municipalities' legacy debts that also takes eastern German municipalities into account.

Many cities and towns have little money and old debts. The SPD wants to solve this problem. The federal government, states and towns should work together. Funding programs should become simpler.

For eastern German municipalities, the platform names the old municipal housing companies and the AAÜG pension transfer law as burdens. Long-term financing agreements between levels of government are planned, for example for education, transport, urban development and heat planning. Municipal planning capacity is to grow and funding programs are to be simplified. Through the Deutschlandfonds, municipal housing companies, energy suppliers and transit operators are to receive equity or long-term loans.

The SPD wants to fight tax evasion, financial crime and money laundering harder and build up a dedicated agency for it. A uniform minimum corporate tax of 15 percent is to apply across Europe.

Some people and companies do not pay their taxes. The SPD wants to fight this harder. An agency should take care of it. Across Europe, companies should pay at least 15 percent tax.

VAT fraud is to be pushed back, especially in cash-heavy industries. Gaps in the transparency register are to be closed, and civil society is to regain access to it. A reporting requirement is planned for domestic tax arrangements. The 15 percent corporate tax is to rest on a common tax base throughout Europe.

The SPD wants to keep levying the solidarity surcharge and use it to fund the country's transformation. The group of people paying it is not to grow beyond today's.

The Soli is an extra tax. Today only people with very high incomes and companies pay it. The SPD wants to keep the Soli. But no more people should pay it than today.

The platform notes that 90 percent of income taxpayers already no longer pay the surcharge. It applies to the ten percent with the highest incomes as well as corporations and people with investment income. The SPD says the surcharge proved its worth during reunification.

The SPD wants to tax very large fortunes again and introduce minimum taxation of large business assets under the inheritance tax. It says work is taxed more heavily than wealth today; the states are to spend the extra revenue on education.

Very rich people should pay more tax. The SPD wants a tax on very large fortunes again. People who inherit a big company should pay at least a fixed share. The family's own home stays tax-free. The money should go to schools.

The minimum taxation of large business assets is to apply within the existing inheritance and gift tax rates and also cover family foundations. Personal allowances are to rise, and the owner-occupied family home stays exempt. The SPD also backs the internationally coordinated minimum tax on the super-rich that Brazil launched in the G20. Revenue from these taxes goes to the states, which the SPD wants to invest it in the education system.

The SPD wants to tax investment income at regular income tax rates and introduce a financial transaction tax. Gains from selling property the owner does not live in would no longer be tax-free even after ten years.

Profits from investments should be taxed like wages. The SPD also wants a tax on trades in stocks and securities. People who sell a rented house at a profit should always pay tax. Today that is tax-free after ten years.

The financial transaction tax is to come in step with European partners where possible; the platform points to Paris and Milan, where such a tax exists. The property change concerns private sales of real estate the owner does not occupy. The SPD expects less speculation, more long-term investment and possibly a larger housing supply.

The SPD wants to lower income tax for about 95 percent of taxpayers and, in return, draw more on very high incomes and wealth. It argues that work is currently taxed comparatively heavily and wealth comparatively lightly.

Most people should pay less income tax. Very rich people should pay more. Tax returns should become simpler. The tax office fills them in beforehand. Extra pay for overtime should be tax-free.

The pre-filled tax return is to become standard; tax authorities would notify people on their own initiative and pay refunds automatically. Overtime bonuses beyond collectively agreed full-time hours would be tax-free. If employers pay part-time staff a bonus for working more hours, that bonus would get favorable tax treatment, with abuse to be ruled out.

The reduced value-added tax rate on food is to drop from seven to five percent. After years of rising prices, the SPD wants to relieve low-income households in particular and have the market power of large retail chains watched more closely.

Food has become much more expensive. The SPD wants to lower the tax on food. It would fall from seven to five percent. That helps people with little money the most. Agencies should check big retailers' prices more closely.

According to the platform, retailers pass most of such a tax cut on to customers. Low earners would benefit most because they spend a large share of their income on food. The responsible authorities are to be strengthened, disclose how selected food prices are composed and develop along the whole chain, and examine possible competition violations.

The SPD wants to distribute the tax burden within couples more fairly while taking existing life choices into account. Tax classes III and V are to be merged as soon as possible into the factor method of class IV. Single parents would get more effective tax relief.

The SPD wants to change taxes for families. For couples, the tax should be shared more fairly. Tax classes 3 and 5 would go away. Single parents should be able to subtract an amount directly from their tax.

The switch to the factor method has already been initiated and is to be completed quickly. The SPD wants to review its effects and possible further steps later. The relief amount for single parents would in future directly reduce the tax owed rather than taxable income.

The SPD wants to advance a worldwide tax on billionaires together with other countries. The very rich are to contribute more to funding the common good, the UN Sustainable Development Goals and climate action; the international financial system is also to become fairer.

The SPD wants a new tax for billionaires. Many countries should introduce it together. The money should help all people and the climate. Poor countries with high debts should get relief.

The tax is to be achieved through a Global Alliance for Tax Justice; the platform justifies it with the growing gap between rich and poor worldwide. The International Monetary Fund, the World Bank and regional development banks are to put investment in education, health and climate protection at the center. For highly indebted countries, the SPD relies more on debt swaps: obligations are exchanged for investment in social and ecological transformation.