Solidarity surcharge

from Wikipedia, the free encyclopedia

The solidarity surcharge (colloquially known as "Soli") is a supplement to income tax and corporation tax . Originally limited to one year in 1991, this tax has now existed for almost 3 decades. It was introduced to finance the various "additional burdens [...] from the conflict in the Gulf [...] for the support of the countries in Central, Eastern and Southern Europe [...] and the costs of German unity". From 1995 the surcharge (unlimited) was levied to finance the costs of German unity and has existed until now; since 1998 the amount has been 5.5% of income and corporation tax. The revenue is based on Art. 106Paragraph 1 No. 6 GG is granted to the Federation alone. Therefore, the Solidarity Surcharge Act did not require the approval of the Bundesrat under Article 105.3 of the Basic Law.

calculation

Income tax and solidarity surcharge 2018 based on the taxable income (basic tariff without child allowances)

The solidarity surcharge is 5.5% of income or corporation tax ( § 4 SolzG). An exemption limit with a sliding zone applies to the collection of wage and income tax . On the corporate tax and the capital gains tax is solidarity surcharge levied without consideration of exemption limit.

Current legal situation

It is only levied if income tax (or wage tax in wage tax classes I, II and IV to VI) is more than € 972 / year (€ 81 / month) or more than 1,944 in the case of joint assessment (or in wage tax class III) € / year (€ 162 / month). Therefore, no solidarity surcharge has to be paid for gross income of up to around € 1,544 / month in income tax class I and € 2,923 / month in income tax class III. Above this limit, the average solidarity surcharge rate is initially below 5.5% (based on the tax amount) and only reaches this maximum rate at around € 1,680 / month (income tax class I) or € 3,220 / month (income tax class III) (§ 4 sentence 2 SolZG 1995 ). The marginal tax rate (also related to the tax amount) within this sliding zone is 20% due to this calculation rule; after that it drops to the average rate of 5.5%.

When calculating the underlying taxable income , child allowances are taken into account (also for parents who receive child benefit), so that there is no solidarity surcharge for income tax class III and two children up to € 4,427 / month gross income. These figures relate to the year 2019. As a larger proportion of the pension insurance contributions ( pension lump sum ) can be deducted from income from year to year , the values ​​change every year, even if the tax rates remain the same.

Legal situation from 2021

Income tax and solidarity surcharge from 2021 compared to 2020 based on the taxable income

The solidarity surcharge is only levied if the income tax (or the wage tax in wage tax classes I, II and IV to VI) is more than € 16,956 / year (€ 1,413 / month) or, in the case of joint assessment (or in wage tax class III), more than € 33,912 / year (€ 2,826 / month). The exemption limit related to the annual taxable income is around 61,700 € / year, for married couples double that, i.e. 123,400 € / year. This is followed by a sliding zone. The marginal tax rate (based on the tax amount) within this sliding zone is 11.9% due to the statutory calculation rule; thereafter it drops to the average rate of 5.5%.

There is no solidarity surcharge to be paid for gross income of up to around € 6,004 / month in wage tax class I and € 11,160 / month in wage tax class III. Above this limit, the average solidarity surcharge rate is initially below 5.5% (based on the tax amount) and only reaches this maximum rate at around € 9,000 / month (income tax class I) or € 17,000 / month (income tax class III).

When calculating the underlying taxable income , child allowances are taken into account (also for parents who receive child benefit), so that no solidarity surcharge applies for income tax class III and two children up to € 12,360 / month gross income.

The tax rate on investment income and corporate income tax remains unchanged. Investors and corporations therefore do not benefit from the lowering of the solidarity surcharge .

Measurement and survey

The solidarity surcharge law (SolZG) regulates the measurement and collection of the solidarity surcharge. The solidarity surcharge is a direct tax and is due to the federal government ( federal tax ). The revenue amounted to 18.93 billion euros in 2018.

history

introduction

In the Second Gulf War (January to March 1991) Germany assumed around 15–20% of the costs, 16.9 billion DM . The draft law of the government parliamentary groups of March 11, 1991 was supposed to generate 22 billion DM from the one-year solidarity surcharge. It was justified as follows: "Additional burdens result not only from the conflict in the Gulf ..., but also for the support of the countries in Central, Eastern and Southern Europe [...] There are additional tasks in the new federal states." Proclamation in the Federal Law Gazette on June 24, 1991, it became law.

development

Period height
1991 7.5% in the 2nd half
effective: 3.75%
1992 7.5% in the 1st half
effective: 3.75%
1993-1994 none
1995-1997 7.5%
since 1998 5.5%
Comparison of the solidarity surcharge before and after the reform planned for 2021 depending on the annual taxable income (calculated with the 2019 basic tariff without child allowances)

The solidarity surcharge was initially levied from July 1, 1991 to June 30, 1992 and amounted to 7.5 percent p. a. the income / corporation tax. For 1991 and 1992, 3.75 percent of the income tax / corporation tax was also levied as a solidarity surcharge, as it was only levied for six months each year.

In 1993 and 1994 no solidarity surcharge was levied. From 1995 a solidarity surcharge was introduced again. Reason: Financing the costs of German unity . From 1995 to 1997 the surcharge was 7.5 percent; since 1998 it has been 5.5 percent.

After the 2017 federal elections , the CDU , CSU and SPD agreed in their exploratory talks and in the coalition agreement to "relieve especially lower and middle incomes from the solidarity surcharge". In a first step, with the law to reduce the solidarity surcharge, around 90% of all solidarity payers are completely relieved of the solos through an exemption limit (with a sliding zone). The reduction amounts to 10 billion euros for the year 2021, i.e. a good half of the current annual revenue of almost 19 billion euros.

criticism

Constitutionality

The constitutionality of the solidarity surcharge has been controversial for many years and has preoccupied the courts. In 2006, the taxpayers' association appealed to the Federal Constitutional Court . The Federal Ministry of Finance showed on 10 November 2006 to the country's tax authorities, tax assessments only in terms of the solidarity tax law from 1995 provisionally make, has finally decided until the Federal Constitutional Court. In a decision of February 11, 2008, the Federal Constitutional Court did not accept the constitutional complaint for decision without justification. Therefore, as of May 14, 2008, the provisional determination of the solidarity surcharge was lifted again.

The Lower Saxony Finance Court considers the solidarity surcharge - since 2007 at the latest - to be unconstitutional and has submitted a pending lawsuit to the Federal Constitutional Court in accordance with Art. 100 GG . The judges stated that there was a long-term financial need to finance the costs of German unity. This should not be covered by levying a supplementary charge. The Federal Ministry of Finance thereupon instructed the state finance authorities on December 7, 2009 to only set the solidarity surcharge for all assessment periods from 2005 onwards. On the other hand, the tax courts in Münster and Cologne are of the opinion that the solidarity surcharge for 2007 is also constitutional.

On September 8, 2010, the Federal Constitutional Court ruled that, for constitutional reasons, supplementary taxes do not have to be limited in time. The advance of the Lower Saxony Finance Court against the solidarity surcharge was rejected. The Karlsruhe judges also rejected the view of the finance judges that the solidarity surcharge should have been dropped due to various tax reductions in recent years. According to the constitutional judges, tax rates have been lowered, but at the same time their tax base has been broadened. The Federal Constitutional Court had declared the submission to be inadmissible and therefore did not carry out a substantive examination.

In August 2013 the Lower Saxony Finance Court submitted the solidarity surcharge for 2007 to the Federal Constitutional Court for review with new legal considerations and granted provisional legal protection. The proceedings have been pending since February 2014.

Discussion about abolition

A political debate has been going on for years as to whether the solidarity surcharge should be abolished. In 2008, the Institut der deutschen Wirtschaft proposed the short-term cancellation of the solidarity surcharge in order to stimulate the economy and strengthen domestic demand.

According to a representative survey by Infratest dimap of 1003 respondents in August 2013, a narrow majority of the eligible population in Germany spoke out in favor of abolishing the solidarity surcharge (54:44 percent). In West Germany, the majority is somewhat more pronounced (58:39 percent), in the East, however, only a minority is in favor of the abolition of the soloist (37:62 percent).

On December 6, 2014, Chancellor Angela Merkel spoke out in her video podcast in favor of maintaining the solidarity surcharge after the end of Solidarity Pact II beyond 2019.

In an interview in September 2016, the then Federal Minister of Finance, Wolfgang Schäuble , spoke out in favor of letting the “solidarity surcharge expire constitutionally after 2019”. His proposal is to "abolish the solidarity surcharge from January 1, 2020 in eleven equal installments by January 1, 2030".

In August 2019, the Federal Ministry of Finance around Olaf Scholz presented a bill to abolish the solidarity surcharge. According to the draft law, the soli would be canceled in the "first step" for around 90 percent of citizens (91 percent of employees and 88 percent of traders). According to the Federal Ministry of Finance, the complete abolition of the solos would cost around 11 billion euros. The Federal Cabinet approved Olaf Scholz's plans. According to these, single employees would only have to pay the surcharge from 2021 onwards with a gross annual income of more than 74,000 euros. The Bundestag passed this law on November 14, 2019.

The scientific service of the Bundestag published on 30 August 2019, a report of the Federal Court that it speaks out on constitutional grounds, completely abolishing the solidarity tax no later than the end of the new financial programming period a year 2023rd As early as December 31, 2019, the constitutional legitimacy was questionable.

Use of funds

The income is not earmarked and is used for all expenses. Helmut Seitz therefore said on tagesschau.de that the fraudulent labeling should end and that an alternative should be found at the latest when the Solidarity Pact II expires. Together with the Eastern Working Group on behalf of the Federal Government, he said that from 2020 the difference would no longer be due to the new federal states, but to the structurally weak areas of Germany as a whole.

Web links

Wiktionary: Solidarity surcharge  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. ↑ § 4 Paragraph 4 No. 1 SolzG
  2. ↑ a b c d calculated with the BMF tax calculator . Retrieved November 14, 2019 .
  3. ↑ a b Law on the Reduction of the Solidarity Surcharge 1995. Accessed on December 12, 2019 .
  4. ↑ a b Tax revenue from the solidarity surcharge in Germany from 2004 to 2018 (in billion euros) ; statistia.com, accessed January 12, 2018
  5. ↑ Amid friendship - Germany's contribution to the liberation of Kuwait. German Embassy Kuwait, archived from the original on December 8, 2014 ; Retrieved January 3, 2017 .
  6. ^ Draft law to introduce a temporary solidarity surcharge. (PDF) In: Bundestag printed matter 12/220. CDU / CSU and FDP, March 11, 1991, accessed on January 3, 2017 .
  7. ↑ File number 2 BvR 1708/06
  8. ↑ BMF letter dated November 10, 2006 on the provisional nature of the determination  ( page no longer available , search in web archives )@1@ 2Template: Toter Link / www.bundesfinanzministerium.de
  9. ↑ BMF letter dated May 14, 2008 on the lifting of the provisional determination  ( page no longer available , search in web archives )@1@ 2Template: Toter Link / www.bundesfinanzministerium.de
  10. ^ Decision of November 25, 2009, file number 7 K 143/08
  11. ↑ Lower Saxony Finance Court considers the solidarity surcharge to be unconstitutional. Lower Saxony Finance Court, November 25, 2009, accessed on January 3, 2017 (press release).
  12. ↑ BMF letter of December 7, 2009 on the provisional determination from 2005 ( Memento of January 23, 2010 in the Internet Archive )
  13. ↑ Solidarity surcharge for 2007 is constitutional - judgment of the Münster Finance Court on December 8, 2009 - summary at free-urteile.de
  14. ↑ Solidarity surcharge in 2007 still constitutionally - judgment of the Cologne Finance Court on January 14, 2010 - summary at free-urteile.de
  15. ↑ Constitutional judges reject solicitation objections. Spiegel Online, September 23, 2010, accessed November 27, 2015 .
  16. ↑ Decision 2 BvL 3/10 of the Federal Constitutional Court of September 8, 2010
  17. ↑ Solidarity surcharge: Finance court grants temporary legal protection. Lower Saxony Finance Court, October 19, 2015, accessed on November 27, 2015 (press release).
  18. ↑ BVerfG, Az. 2 BvL 6/14
  19. ↑ Solidarity surcharge: Finance judges consider “solos” to be unconstitutional. Financial test, November 24, 2015, accessed December 29, 2018 .
  20. ↑ IW calls for the abolition of the “Solis”. Kölner Stadt-Anzeiger, November 15, 2008, accessed on May 6, 2014 .
  21. ↑ ARD-DeutschlandTREND - Solidarity surcharge: Abolish or keep? Infratestdimap, August 1, 2013, accessed June 15, 2015 .
  22. ↑ Press and Information Office of the Federal Government - Merkel: The Soli remains
  23. ↑ Finance Minister Schäuble wants to abolish the solidarity surcharge from January 1, 2020. In: WirtschaftsWoche Online. Handelsblatt GmbH, September 23, 2016, accessed on September 23, 2016 .
  24. ↑ Hendrik Wieduwilt: Is a little solos unconstitutional? In: Frankfurter Allgemeine Zeitung. August 11, 2019, accessed August 13, 2019 .
  25. ↑ https://www.tagesschau.de/inland/soli-haben-103.html
  26. ↑ https://www.handelsblatt.com/politik/deutschland/soli-abbau-gesetz-solidaritaetszuschlag-faellt-ab-2021-fuer-die-meisten-buerger-weg/25226892.html
  27. ↑ Expert opinion of the Federal Commissioner for Economic Efficiency in Administration on the reduction of the solidarity surcharge - legal and financial aspects. (PDF) In: bundesrechnungshof.de. Kay Scheller - President of the Federal Audit Office as Federal Commissioner for Economic Efficiency in Administration, June 1, 2019, accessed on August 30, 2019 (published on August 30, 2019).
  28. ^ Debate about the abolition of the solidarity surcharge, "The discussion is running idiotically" ( Memento from September 13, 2008 in the Internet Archive ) Tagesschau.de, October 2, 2007