Income Tax in Germany – Is There a Need for Reform?

In the April 2017 edition of the Economists Panel jointly conducted by ifo and the Frankfurter Allgemeine Zeitung, economics professors at German universities were asked about income tax and potential reform options. The debate over a potential income tax reform focuses on issues of fairness on the distribution of the tax burden, as well as savings and performance incentives. Issues relating to bracket creep and solidarity surcharge are also frequently discussed. The majority of survey participants oppose any fundamental reform of the present income tax system. However, economists support far-reaching income tax relief for taxpayers, the elimination of solidarity surcharges, as well as adjustment measures to compensate for bracket creep.