Merz rules out introducing wealth tax in Germany

Chancellor Friedrich Merz (CDU) has ruled out taxing high-income earners more to plug budget deficits and reduce economic inequality in Germany.

Merz spurns SPD proposal to tax high-income earners

In an interview with public broadcaster ZDF on Sunday, German Chancellor Friedrich Merz said that his CDU-SPD coalition does not plan to raise taxes for high-income earners. 

Merz’s comments come around 10 days after Federal Finance Minister Lars Klingbeil (SPD) hinted to ZDF that the coalition would increase taxes on high-income earners to fill a 30-billion-euro deficit in its 2027 budget. Klingbeil said he wouldn’t “take any option off the table” while looking for a solution.

Merz rebuffed these plans. "We have a coalition agreement, and we have agreed in this coalition agreement that taxes will not be raised. [...] And this coalition agreement stands,” the chancellor told ZDF.

Video credit: ZDFheute Nachrichten / YouTube.com

Germany has four tax brackets. Those who earn more than 277.826 euros annually are in the top bracket and taxed at 45 percent. Only 4 million of the 83,9 million people who live in Germany are in the top bracket.

Germany’s super-rich only pay the 10th-highest personal tax rate in Europe. In 2025, Denmark taxes its top earners at the highest rate in Europe, at 55,9 percent. France (55,4 percent), Austria (55,0 percent), Spain (54,0 percent) and Belgium (53,5 percent) round out the top five.

Germany needs to work more, says Merz

Rather than raising taxes to fill the 2027 budget deficit, Germany needs to work more, “more productively and more efficiently”, Merz claimed.

The chancellor said employees in Germany are absent too often, that the country has “the highest rates of sick leave in Europe”, works “200 hours fewer than the Swiss” and that Germany has “the highest labour costs in Europe”. 

While Germany’s sick leave rates reached a record high in 2024, a study by the IGES Group found that, in terms of workdays lost due to sick leave, Germany records the seventh-highest number of days lost in Europe.

Additionally, a 2024 study by HES in Switzerland found that employees working while sick—so-called presenteeism—can cost national economies billions of dollars each year. This is because ill workers are more likely to be unproductive and produce work with errors. Ill staff may also infect other staff, making the problem exponentially worse.

When it comes to hours worked, 2024 figures from Eurostat show that employees in Germany spend an average of 34 hours per week working at their main job, compared to 33,6 hours in Switzerland.

Merz’s claim about Germany having the highest labour costs in Europe is also inaccurate. According to 2024 Eurostat figures, employees in Germany are paid an average of 43,4 euros per hour, less than employees in Luxembourg, Norway, Iceland, Denmark, Belgium, the Netherlands, Austria and France.