Kretschmer demands uniform cost solution for federal states and municipalities
Kretschmer demands uniform cost solution for federal states and municipalities
In a recently held meeting of the Prime Minister, Michael Kretschmer (CDU), the chairman of the Prime Ministers' Conference, has announced a joint claim by 16 federal states for reimbursement of costs for a planned economic incentive package. Kretschmer emphasized that the financial burdens of this project must largely be borne by the federal states and municipalities, whereby the need for a fair distribution of costs between the federal government, the states and municipalities came to the fore. The discussion took place in the absence of Federal Chancellor Friedrich Merz (CDU), who was a visit to the USA.
Kretschmer spoke out for a reform that is intended to increase the competitiveness of Germany. He warned that the associated financial burdens may not only be passed on to the municipalities or countries. In addition, there was agreement among the prime ministers that a solution had to be found in order to make the distribution of costs fairer. In this context, Kretschmer suggested that federal laws that raise costs to the federal states should be subject to compensation.
tax cuts and reforms
In parallel to the discussions of the Prime Minister, the CDU/CSU parliamentary group plans comprehensive tax cuts and a simplification of tax law to promote economic growth in Germany. The application to gradually reduce the tax burden on intended profits to 25 percent from 2025 was discussed in the Bundestag last year. CDU MP Fritz Güntzler pointed out that Germany is in a deep economic crisis while the global economy is growing.Similar concerns also expressed other politicians and MPs. CSU MP Sebastian Brehm warned that without reducing the tax burden, Germany could continue to attract attractiveness. However, there are also critical voices from the opposition, such as SPD MP Parsa Marvi, who denounced a lack of serious counter-financing for the Union.
investment incentives as a growth engine
In order to further improve the economic situation, Federal Minister of Finance Lars Klingbeil (SPD) presented a draft law for comprehensive tax cuts and investment incentives. These measures should come into force from July 2025 and include special depreciation for investments and a reduction in corporation tax. The planned “investment booster” stipulates that companies can use special depreciation of up to 30 percent for newly made investments from 2025 to 2027.
The tax changes are part of the coalition agreement between the parties and are intended to help strengthen the competitiveness of Germany business location. According to forecasts, however, the tax failures due to the planned measures could be considerable, which could burden the federal government, the federal states and the municipalities.
The combined discussion about the need for reimbursement and the pressing measures to strengthen economic growth shows that German politics is in the middle of a complex economic challenge. The coming months will be decisive for how these efforts will look in practice.
For more information about the demands of the countries, read ZVW.de . Information about the tax plans can be found on Bundesag.de and the reform of tax href = "https://www.zdfheute.de/politik/Klingbeil- tax-reliefing-investitionen- company-wirtschaft-100.html"> zdfhute.de .
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