Tax reform 2000 in Germany
The tax reform 2000 was passed on July 6, 2000 by the German Bundestag with the Tax Reduction Act and came into force on January 1, 2001. The substance of the tax reform are the reduction of input and highest tax rate in the income tax , the increase in the basic allowance and the relief of companies in Germany. The last stage of the tax reform came into force on January 1, 2005. The tax rate was then 15% (1998: 25.9%), the top rate at 42% (1998: 53%).
The tax reform goes back in principle to the coalition agreement between the SPD and Bündnis 90 / Die Grünen from October 1998. However, this provided for much smaller tax cuts; in the third and final stage in 2002, the top tax rate should be 48.5% and the starting tax rate 19.9%. In the election manifesto for the 1998 Bundestag election , the SPD had aimed for a top tax rate of 49% and an initial tax rate of 15%, whereby an even greater reduction could be made if the financing was secured. This reform was to be passed by January 1, 1999, when an SPD majority in the Bundesrat was still secured. The difference in the top tax rate between the SPD election program and the coalition agreement is due to the Greens, who campaigned for a lower top tax rate.
Legislative process
The tax reform bill originally introduced by the federal government in February 2000 and passed in May 2000 includes lowering the top and bottom tax rates to 45 and 15%. The opposition-led Federal Council rejected the bill on June 9, 2000 and called the mediation committee . For the states as well as for the federal government, the reform was associated with major revenue shortfalls. In order to persuade the Federal Council to give in, Finance Minister Hans Eichel postponed the entry into force of the tax exemption for capital gains by one year to January 1, 2002. The FDP, as the coalition partner of the SPD in Rhineland-Palatinate at the time , called for a greater reduction in the top tax rate. This requirement was met by lowering the top tax rate, contrary to the government draft, to 42% and thus three percentage points more than decided by the Bundestag.
Even after these corrections, resistance came in particular from financially weak Berlin (Grand Coalition), from Brandenburg (Grand Coalition), from heavily indebted Bremen (Grand Coalition) and from Mecklenburg-Western Pomerania (SPD- PDS government). As a result, the federal government endeavored to accommodate these countries through financial commitments. Berlin was promised 200 million euros for the capital's tasks of internal security and culture (renovation of museums) as well as for the modernization of the Olympic Stadium . Brandenburg and Mecklenburg-Western Pomerania have also been promised by the federal government to take over the original state tasks. To this day, Bremen has not received any financial aid pledges that have not been redeemed. In the plenary session of the Federal Council on July 14, 2000, the tax reform was finally approved by the countries mentioned so that it could come into force. The German government's approach of “buying” approval for the law by means of financial commitments met with widespread public criticism.
Goal setting
- Strengthening the competitiveness of the German economy
- Promoting growth and jobs
- Tax fairness, transparency and planning security in the tax system
- Tax relief for employees, families and companies
In detail:
- Corporate income tax rate reduced from previously 40% ( retention rate ) or 30% (distribution rate) to a uniform 25%
- Option for partnerships to be taxed like a corporation ("option model")
- Replacement of the full credit system for corporation tax by the half-income system
- Tax exemption on profits from the sale of shares in corporations by corporations
Individual evidence
- ^ Coalition agreement between the SPD and Bündnis 90 / Die Grünen of October 20, 1998
- ^ Election program of the SPD for the 1998 Bundestag election ( Memento of the original from October 9, 2006 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Article in the weekly newspaper DIE ZEIT from September 8, 2005
Web links
- Statement by the economist Rudolf Hickel, who belongs to the memorandum group, on the tax reform 2000. (PDF file; 49 kB)
