The state is taking more and more taxes on retired people. The income from additional income tax from the increase in pensions is likely to increase by 420 million euros this summer, as the answer from the Federal Ministry of Finance to a request from the left faction in the Bundestag shows. It is available to the German Press Agency in Berlin.
In making the estimate, the ministry is assuming the previously estimated 3.15 percent increase in pensions in the west and 3.92 percent in the east. Exactly how pensions will develop will not be known until March.
The income tax of taxpayers with total pension income is therefore likely to rise from 40.8 to 42.9 billion euros. Among them, however, only around 3.5 billion euros flow from taxpayers with predominant or exclusive pension income to the state.
Number of taxable pensioners increases
In 2015, around 34.65 billion euros of income tax was paid to the state by taxpayers with pension income – just under 1.3 billion of those who exclusively or predominantly received a pension.
The number of taxable pensioners is continuously increasing. Until 2005, there was an allowance of 50 percent of the pension. Since then, the tax portion of the pension has initially increased by two percentage points annually. From 2040, statutory pension income for new retirees will be taxed completely.
In return, pension contributions have been deducted more and more from taxable income since 2005. Health and nursing care insurance contributions and some everyday expenses can also be claimed. The tax is due when the total income of a pensioner is above the basic allowance (9,408 euros).
Left-wing faction leader Dietmar Bartsch told the German press agency: “We need a general overhaul of our tax and pension system.” Pensioners today have to pay three times more taxes than in 2005 – that is unfair. “Pension taxation contradicts the sense of justice of the majority in our country,” said Bartsch. “If pensioners pay ten times as much tax as heirs to millions, it is high time for a major tax and pension reform.”