Baum explained that if more than one index cut has to be postponed until 2024, then the tripartite parties have to meet once again. In that case, government and social partners would need to discuss how far the cuts could potentially be “stretched”.
Nevertheless, the DP politician guaranteed: “No index cut will be abolished.” Even if two, three, or more cuts have to be paid out simultaneously on 1 April 2024? To that question, Baum responded: “In that case, we would have to see if they can be stretched out over the year 2024, maybe postponed to 2025 ... but like I said, it is hard to predict in which direction things will move.”
To compensate the loss in buying power caused by the postponing of the index cuts, the government plans on introducing successively lower tax credits, which will even overcompensate people with gross salaries of up to €100,000 per year.
The DP politician argued against adjusting the country’s tax rates to inflation, noting that it would cost the government €600 million per year, and that it would primarily be a relief for wealthy people. Raising the top tax rate from 42 to 45% would, according to calculations, only bring in about €50 million.
Baum believes that in times of crisis, the government is responsible for helping those in need of support. Nevertheless, this does not mean that we should make premature tax reforms, he argued. The Democratic Party stands for safe and sustainable government finances “for future generations”, Baum further concluded.
