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"Mr. Lindner can't just do it like that"

The November tax estimate for Hamburg is good.

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"Mr. Lindner can't just do it like that"

The November tax estimate for Hamburg is good. The Hanseatic city should be able to count on additional income from taxes of 576 million euros this year. In the coming year it should be 448 million euros more than forecast in May of this year.

Hamburg's Finance Senator Andreas Dressel (SPD) still doesn't see any reason to be happy in the figures - and blames Finance Minister Christian Lindner and his FDP, among others.

The first reason for Dressel's reluctance is that the additional tax receipts are only slightly above the long-term tax trend that the Senate has calculated from the receipts of the past few years and on which it bases its budget statements. However, the costs for the city have risen significantly and will continue to rise, for example due to the increasing number of refugees, higher compensation payments for local transport tickets and wage agreements to compensate for inflation. For the 49-euro ticket alone, Hamburg will have to contribute around 86 million euros.

From the sheer figures on tax revenue, one could deduce that "we just swim in tax money," said Dressel exaggeratedly. "But that would be the wrong reaction now." Because the second reason why the finance senator considers the figures to be deceptively positive is inflation. It artificially boosts the city's tax revenues, for example through the higher profits that energy suppliers make. An effect in which the state can enrich itself because all citizens pay more.

"We have to return the inflation-related additional tax revenue to the taxpayers through targeted and fair relief - that is also a concern of the Hamburg Senate," Dressel makes clear - and then starts to criticize the Federal Minister of Finance. From Dressel's point of view, Lindner does not want to relieve taxpayers in a targeted or fair manner. Instead, the FDP politician is pursuing the goal of creating inflation compensation for all income groups, including top earners, with his latest plans for changes to the Inflation Compensation Act. "Senators, ministers and other top earners do not need full inflation compensation."

This would eliminate all of the inflation-related additional revenue for the countries. For the year 2023, Hamburg would lose around 60 million euros in income, by 2026 it would be a total of 700 million euros. “Mr. Lindner can't just do that. We'll have to talk about that," said Dressel, who is meeting with his country colleagues on Thursday.

In view of the major risks from the Ukraine war and the associated energy crisis, one would have to make sure "that states and municipalities remain able to act in the crisis, for example to be able to continue financing targeted support measures," said Dressel. Because the plans to relieve the burden on citizens, which the Hamburg Senate supports, reduce Hamburg's income enormously, as the Finance Senator calculated. For 2023, if all government plans were implemented, Hamburg would have 151 million instead of 448 million in additional tax revenue. In 2024, the amount would drop from 552 to six million euros.

In the direction of the citizenship, which is currently advising on the draft budget for the years 2023 and 2024 and wants to adopt it in December, Dressel said: "Large additional spending packages are not possible." The taxpayers' association also followed this argument. One expects clear austerity measures, said the Hamburg chairwoman Petra Ackmann. "The current budget deliberations, where there is certainly still potential for savings, are also ideal for this." However, Ackmann also held the Senate responsible. In particular, the Senate should not lose sight of the rising costs for staff and for the offices of the authorities, she said.

The FDP MP Anna von Treuenfels-Frowein immediately gave other examples. Unnecessary expenditure of millions for “a mobility turnaround that has been misguided so far and unsuccessful climate protection plans” offers numerous opportunities to save. On the other hand, von Treuenfels-Frowein said that one should definitely stick to the relief plans of her party colleague Lindner. "Tax justice must apply to all income groups: for low earners, who are already being relieved by numerous measures by the federal government, but also for middle-income earners and the middle class, who are excessively taxed."

The budget spokesman for the CDU parliamentary group, Thilo Kleibauer, made a similar statement. The Senate must not "undermine measures to mitigate the cold progression from the state level". Tax relief should reach the citizens. Overall, the current tax estimate is "afflicted with high levels of uncertainty," said Kleibauer. There are good reasons why Hamburg decided to align its expenditure planning with the long-term trend in tax revenue. “The red-green coalition must not make any concessions here. Especially after the additional debt of the last few years and in view of rising interest rates, sustainable budgetary discipline remains the order of the day.”

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