Petersberg model
The Petersberg model is a reform model for income tax decided by the CDU in 1997 on the Petersberg near Bonn .
It provides for a lowering of the basic tax rate from 25.9 to 15 percent, the top tax rate is to be lowered from 53 to 39 percent. In return, numerous tax breaks will be abolished, including exemptions for employees. As a counter-financing, the value added tax is also to increase by one percent. Overall, the model provides for a relief of citizens and the economy by 30 billion marks.
The implementation of the model of the then ruling CDU was blocked in the Federal Council by the SPD- led countries, in particular it met with resistance from Oskar Lafontaine . However , the red-green government in office after the 1998 Bundestag elections implemented a similar reform model from 2000 to 2005 ( tax reform 2000 ), in which the initial tax rate was reduced to 15 (as in the Petersberg model) and the top tax rate to 42 percent. The coalition agreement between the SPD and Bündnis 90 / Die Grünen , however, provided for lower tax rate reductions (initial tax rate: 19.9%, top tax rate: 48.5%).