The most recent tax estimate provided by German economists has signaled that both the federal government and the 16 states can look forward to higher tax income. But the windfall is not evenly distributed.
The panel of experts tasked with presenting a tax estimate for Germany twice a year said in its spring outlook that Europe's powerhouse would most likely see 54 billion euros ($58.6 billion) more in tax revenues than expected in the previous report in autumn.
According to the latest estimate, Germany's 16 states are predicted to secure the bulk of the additional windfall (29.6 billion euros), while communities across the nation will also get a huge share.
By contrast, the federal government will receive a mere 3 billion euros more than predicted in November of last year, mainly because of rising money transfers to the states as they struggle to deal with the financial challenges of accommodating more refugees and migrants.
What to do with the money?
All in all, tax income is expected to rise gradually from a total of 732.2 billion euros this year to over 850 billion euros by 2021.
"The German government has lived up to its financial commitments," Finance Minister Wolfgang Schäuble said in a statement. "First we secured a balanced budget, and then we provided more money for investments, and now we can talk about tax reductions."
SPD chancellor candidate Martin Schulz insisted the additional billions of euros in tax revenues should be used to boost investment, indicating he did not agree with Schäuble that enough was already being done.
Schulz spoke of a "huge investment backlog" and urged the government to pump more resources into education and infrastructure projects as well as into affordable housing.
hg/jd (AFP, Reuters)