Creeping additional burden: where the tax authorities “forget” inflation everywhere

It is not only the cold progression that annoys many taxpayers – inflation is also causing tax allowances to shrink. One has not been adjusted since 1955, shows an overview of the taxpayers’ association.

fMinister of Finance Christian Lindner (FDP) is urging the income tax rate to be adjusted to inflation: wage increases should not already lead to higher tax rates if they at most compensate for inflation. His draft law against this cold progression is now available, and at least Chancellor Olaf Scholz (SPD) is in favor of it. Insidious additional burdens of this kind also affect taxpayers in other places – which are often forgotten politically: All kinds of allowances and lump sums gradually lose their value if they are not also increased in line with inflation.

How much catching up there is here is now illustrated by a list by the taxpayers’ association. He then examined a total of 17 lump sums and allowances in income tax law. The best-known example, but by no means the most blatant, is the employee lump sum – the amount that employees can definitely deduct from income tax without providing individual proof of travel costs and other expenses: Although the traffic light recently increased this for the first time since 2011, from 1000 to 1200 euros per year. However, if you add up the inflation since then, according to the calculations of the taxpayers’ association on January 1, 2023, that is again too little. It would then actually have to be at least 1252 euros. And so as not to keep chasing after inflation, he immediately demands an increase to 1,500 euros.