Taxpower Thuringia: Communities are fighting with falling income!

Taxpower Thuringia: Communities are fighting with falling income!

The tax power in Thuringia experienced a slight decline in 2022. A total of around 2.16 billion euros in tax power were generated in the approximately 600 municipalities in the federal state, which corresponds to 1,025 euros per inhabitant. The Süddeutsche Zeitung has announced these figures. While the lifting rates for the basic and trade tax hardly changed- property tax from 439 to 440 percent and trade tax from 413 to 414 percent- the total income volume from trade tax was 1.07 billion euros and the income from basic taxes of EUR 55 million or 4 percent lower than in the previous year.

On the other hand, income from the municipal share of the income tax rose by 38 million euros to 750 million euros. The sales income was also increased by 1 million euros to 173 million euros. Differences in tax power are shown between independent cities and communities belonging to the district; While the independent cities have an average of 1,082 euros per inhabitant, it is only 1,006 euros for the municipalities belonging to the district.

tax increases in the first half of 2023

But there is a trend: In the first half of 2023, 36 municipalities in Thuringia have already increased their taxes. This measure affects not only the trade tax, where 26 municipalities recorded an increase, but also the property taxes A and B. Many municipalities use the increases to increase their income and to expand their financial scope, which is crucial for the local health insurers, how n-tv. In particular, companies are burdened with higher taxes, which is seen as a necessary measure in the current economic situation.

The communities that adapted their lifting rates - some for one tax type, others for two or even all real tax rates - have recognized that their income is at stake. These increases are necessary in order to cope with the long -term financial challenges that result from demographic development, among other things. A clear imbalance is also evident in the tax revenue between the different regions, such as a [study by Antenne Thuringia] (https://www.antenethueringen.de/p/studie- taxpower-der-thuring-zu-gering-gering-gering-7hpl1efcgcjwrmm0s3hsaa) illustrated.

low tax revenue and their effects

Another point that affects the situation of the Thuringian municipalities is the dependence on the allocations of the federal and state governments. According to the municipal financial report 2023 of the Bertelsmann Foundation, the municipalities completed in 2022 with a surplus of around 370 million euros. Nevertheless, Thuringia's tax revenues are still very low compared to other federal states. The average level per inhabitant only reaches half of the Hessian comparison value. If, like the Kyffhäuserkreis and the Altenburger Land, the financially weakest municipalities in Germany are especially the city of Jena, which is above average in a nationwide comparison.

Despite the overview of positive developments such as a surplus for twelve years or the increase in municipal investments to close to the previous year, the investment deficit continues to grow. As a result, tasks for sustainability, such as the maintenance of water supply systems or green areas, are increasingly getting into the background.