(Mountain; 11/12-03; p.2)

Income tax and principles

Christian Democrat F Merz now has become one in a queue of tax-simplifiers.
Preceded by in their goal similar suggestions of former supreme court judge P Kirchhof and Liberal O Solms, Merz also presented a tax scheme based on stages instead of continuous progression. (All schemes in one graphic were realised for German news programme ARD 'tagesschau' on 07/11/03.)

Regardless of the special stage limits, all suggestions have a characteristic in common: since there is no progression within a stage, every bread-winner – and every employer – can easily figure out which effects changes in wages will have. A within limits steadily growing taxation as is practised nowadays in Germany, on the contrary is confusing. Two graphs may show the differences:

Both principles provide a lower limit, i.e. an area of income that is not taxed. One may define this as lowest-wage area.
Both as well have an upper limit rate that because of a supreme court decision must not exceed fifty per cent: of one more earned Euro, the state may at most withdraw fifty cents. One may define incomes taxed like this as highest-income area.

Stipulating a lowest-wage as well as a highest-income area is a political matter. However, the decision will be made relatively easy for low tax figures and low numbers of people affected, respectively. (read on here)