Union Unveils Ambitious Plans for Taxes, Pensions, and Migration Policy

The CDU and CSU have unveiled their draft election program, promising sweeping tax relief for citizens and businesses if they win the upcoming federal election. The program outlines reductions in income tax rates and raises the threshold for the top tax bracket. Additionally, the parties aim to lower the value-added tax for restaurant meals from 19% back to 7% and eliminate the solidarity surcharge entirely, which currently affects higher earners and corporations. These measures are intended to ease the financial burden on middle and lower-income groups while stimulating economic growth.

One notable proposal is the introduction of tax-free overtime pay for full-time workers. The parties also plan to reduce corporate taxes to a maximum of 25%, making Germany more competitive globally. However, the program does not specify how these significant tax cuts will be financed, as the parties insist on adhering to Germany’s constitutional debt brake.

Pension Reforms and Financial Security Initiatives

The Union’s program includes a novel pension reform known as the “Frühstücksrente” (“Early Start Pension”), aimed at fostering financial independence from an early age. Under this initiative, the government would contribute €10 monthly into a private pension fund for every child aged 6 to 18. The fund would be managed privately, with tax-free returns until retirement. This program aims to instill a culture of long-term financial planning while reducing future dependence on public pension systems.

For current retirees, the Union proposes eliminating the need for annual tax declarations by allowing tax authorities to calculate and communicate pensioners’ net incomes directly to the pension insurance system. This measure is intended to simplify financial processes for older citizens and improve efficiency.

Stricter Migration Policies

Migration policies take center stage in the draft program, with the Union advocating for a “zero-tolerance” approach to illegal migration. The plan includes turning away migrants at German borders if they arrive from safe EU countries or Schengen member states. To reinforce this policy, the parties propose advanced border security measures, such as the deployment of drones, thermal cameras, and night-vision equipment.

The draft program also outlines a shift from cash benefits to in-kind assistance for migrants, under the principle of “bed, bread, and soap.” This approach aims to reduce incentives for illegal migration while ensuring basic humanitarian needs are met. Furthermore, the Union advocates resuming deportations to countries like Syria and Afghanistan, provided bilateral agreements can be secured to ensure safe returns.

For Ukrainian refugees, the program suggests transitioning newly arrived individuals from welfare benefits to the Asylum Seekers Benefits Act. The Union emphasizes integrating more Ukrainian refugees into the workforce to lessen the strain on social welfare systems. The parties also call for designating additional countries as “safe countries of origin” to expedite asylum processes and facilitate deportations when applications are denied.

Focus on Economic and Social Stability

In addition to tax cuts and migration reforms, the Union’s program prioritizes economic and social stability. Measures include higher travel expense deductions for commuters and incentives for small- and medium-sized businesses to invest in cybersecurity. The parties also aim to streamline administrative processes by reducing redundant reporting requirements and bureaucracy, which they argue stifles innovation and growth.

A central feature of the Union’s fiscal policy is a commitment to Germany’s constitutional debt brake. The program reiterates that no measures will compromise this principle, highlighting the importance of balancing economic relief with fiscal responsibility.

Controversy and Open Questions

Critics have raised concerns about the feasibility of implementing the Union’s ambitious plans, particularly in light of the lack of details on funding sources. Experts argue that such extensive tax cuts, combined with increased spending on border security and pension reforms, may strain Germany’s budget unless offset by substantial spending reductions elsewhere.

Moreover, the migration policies have sparked debate over their humanitarian implications and potential conflicts with EU regulations. Proposals to deport individuals to conflict zones like Syria and Afghanistan have drawn criticism from human rights organizations, who argue that such actions could endanger lives.

The draft program is set to be formally approved by the CDU and CSU leadership teams before being presented by CDU leader Friedrich Merz and CSU chief Markus Söder. As Germany heads into a pivotal election season, the Union’s proposals reflect a bold strategy to address pressing economic, social, and migration challenges. Whether these plans resonate with voters remains to be seen, but they undoubtedly set the tone for a highly contested election.