SPD on finance and taxes

The SPD does not want social security to be financed one-sidedly through labor. The state is to push at the federal level for very high capital income and large transfers of wealth to contribute more.

Today, mainly working people pay for social security. The SPD finds that one-sided. People who earn a lot from capital should pay more. The same goes for large inheritances and gifts. The state should push for this at the federal level.

The demand is aimed at the federal level, where Saxony-Anhalt is to argue for it. The platform cites the ability-to-pay principle, under which those who are economically stronger contribute more. It would affect very high income from capital and large transfers of wealth.

The SPD wants to push at the federal level for tax and contribution relief for low-income households. To that end, the sales tax on basic foods and the electricity tax are to go down. The program justifies this with rising inequality and with the claim that full-time work does not pay enough because of high contributions.

People with little money should pay less in taxes and contributions. Basic foods and electricity should get cheaper. Mini-jobs should no longer exist in this form. Families with little money should get help buying a home.

Federal subsidies for grid fees are to continue permanently beyond 2026. The SPD wants to replace mini-jobs and the sliding pay zone with a monthly allowance on social contributions. The so-called Mittelstandsbauch (the steep rise in income tax rates for middle incomes) is to be eliminated, and tax and social insurance law are to be better aligned for second earners. Private individuals buying real estate for the first time are to pay no property transfer tax. A home ownership grant is to be brought back for low-income families.

To pay for the relief measures, the SPD wants to push at the federal level to scrap tax advantages for income from wealth and financial returns. Fortunes above 100 million euros are to be taxed at two percent. A tax on financial transactions is to be added.

Very rich people should pay more taxes. Anyone who owns more than 100 million euros should pay a 2 percent tax on it. Gains from stocks, rents and interest should be taxed like wages. The SPD wants to use the money to give other people relief.

Income from rental properties, stocks, cryptocurrencies and interest is to be taxed the same way as other income. The program justifies the wealth tax as compensation for the fact that no income taxes are due on unrealized gains. The SPD also demands a financial transaction tax, a levy on trading in financial products. The program points out that, according to the Tax Justice Network, multimillionaires bear a much lower burden at 26 percent than working people at around 48 percent.

The SPD wants to push in the Bundesrat for a new wealth tax, a revised inheritance tax and a levy on windfall profits during crises. The platform argues that the welfare state and the green transition need funding and that those who can afford more should contribute more.

The SPD wants a tax on large fortunes. Large inheritances should also be taxed more. The SPD wants to demand this in the Bundesrat. That is the chamber of the German states. The money should pay for the welfare state and climate action.

On inheritance tax, the exemptions in sections 13a, 13b and 28a of the Inheritance Tax Act would be removed. They would be replaced by deferrals at a moderate interest rate and an allowance of 5 million euros for small and medium-sized businesses. On real estate transfer tax, the SPD wants to rule out avoidance through so-called share deals, meaning the purchase of company shares instead of the property itself. The platform also calls for skimming off windfall profits in times of crisis and tougher action against tax flight.

The SPD wants to press at the federal level for sparsely populated states to count for more in Germany's fiscal equalization system. The background is the expectation that Saxony-Anhalt could have fewer than two million residents in ten years.

German states share tax money with each other. The SPD wants more money for states with few people. Saxony-Anhalt is losing residents. Life should still be similarly good everywhere.

The fiscal equalization system redistributes tax revenue between financially strong and weak states. The SPD wants states with low population density to receive a higher weighting there. It points out that Saxony-Anhalt's population could drop below two million within ten years. The goal is living conditions that are as equal as possible across Germany.

The SPD wants to keep the state budget sustainable in the long term, reduce debt and still make investment possible. Money from the federal special fund is to go mainly into education, health care, energy and digital networks.

The SPD wants to handle the state's money carefully. The state should pay down debt. But it should still be able to invest. Federal money should go to schools, health care, energy and internet. The state should keep saving for pensions of civil servants.

Money from the federal special fund is to be used transparently and with a focus on results. Priorities are more modern education buildings, regional health care, climate-friendly energy projects and digital networks, especially in rural areas. The state's pension fund is to be continued and strengthened through regular contributions. The SPD will examine whether the fund can acquire state-owned real estate to reduce rent costs. The state's construction and property administration is to cut costs and improve processes.

The SPD wants to stop paying for permanent tasks in social services, culture, education and youth welfare through short-term project grants. In the platform's view, the current practice creates uncertainty and makes planning harder.

Many social services only get money for short projects. The SPD wants to change that. Permanent tasks should get permanent money. Then the organizations can plan better. Applying for funding should become simpler and digital.

All funding areas are to be reviewed systematically to see whether they in fact pay for permanent services. Such services are to receive institutional funding, meaning ongoing financing of the organization rather than of individual projects. The platform expects this to bring planning certainty and less administrative work. Funding procedures are also to become simpler, digital and more practical.

The SPD wants to design municipal fiscal equalization so that it covers the real tasks of municipalities. Municipalities should only be given new tasks if their funding is fully secured.

The state gives money to towns and villages. The SPD wants this money to match their tasks. New tasks should only come with enough money. Towns with high social costs should get extra help.

Depreciation is to count in fiscal equalization in the future. Federal grants are not to be offset, because the platform regards them as additional aid. Municipalities with heavy social burdens are to receive targeted extra support. For new tasks, the principle applies that the level of government that orders them bears the cost. Tax offices are also to explain clearly how property tax is assessed.

The SPD wants to reorganize financial relations between the federal government and the states so that municipalities receive a larger share of public revenue. A fluctuation fund and a permanent investment program are meant to give municipalities additional security.

The SPD thinks towns and villages get too little money. They should receive more of the taxes. A fund should help when revenue suddenly drops. A permanent program should provide money for schools, daycare centers and roads.

The trade tax is to be preserved as the most important source of municipal revenue. Municipalities are to get larger shares of income tax and value-added tax, and an inheritance tax reform is meant to benefit them through the states. A municipal tax fluctuation fund would offset revenue drops in crises. A permanent infrastructure and investment program would provide money for schools, daycare centers, roads and public facilities regardless of crises.