Spahn's bold tax reform plan targets subsidies to fund €10B annual relief
CDU parliamentary group leader Jens Spahn has put forward a plan to fund tax reforms by cutting subsidies and tax breaks. His proposal includes a flat-rate reduction of five percent across all existing incentives. The move aims to free up billions while avoiding deeper scrutiny of individual programmes. Spahn’s plan would eliminate smaller funding schemes with an annual budget impact below €50 million. He argues that this approach would simplify the process and gain broader public support. The savings generated would then fund tax relief totalling at least €10 billion per year.
He also ruled out raising taxes on high earners as the sole solution. According to Spahn, such a move could push tax rates to 50 or even 60 percent for skilled professionals and many others. Instead, his focus remains on reducing existing subsidies to create financial flexibility.
The proposal comes as part of wider discussions on reforming Germany’s tax system. Spahn’s approach avoids targeting specific subsidies, which could face resistance from interest groups. By applying a uniform cut, he believes the changes would be fairer and easier to implement. The plan would overhaul funding by trimming smaller programmes and applying a blanket reduction. If adopted, it could provide significant annual tax relief without increasing rates for top earners. The next steps will depend on political negotiations and public reaction to the proposed cuts.
