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Thursday, May 26, 2022

IW Study: The Government package relieves households by up to 825 euros

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The federal government’s package of measures to counteract high energy prices relieves households by up to 825 euros. This was calculated by the German Economic Institute (IW) for the “Welt am Sonntag”. IW tax expert Tobias Hentze told the newspaper that people with low and normal incomes would receive more relief, while people with higher incomes would pay a larger share of the surcharge assessable to the state through income tax.

According to calculations, working singles can expect a relief amount of between €159 and €304, depending on their income level. For families with two children in which both parents work, the deduction ranges between 348 euros and 825 euros.

According to the calculation of the IW model, the greatest beneficiaries are families with a gross family income of 35,000 euros per year. According to the institute’s calculations, 457 euros remain after taxes of the lump-sum amount of the energy price paid to both spouses for a total of 600 euros.

In addition, there is a tax-free family bonus of 100 euros for each of the two children. That makes a total of 657 euros. If you both drive to work, your gas tax burden is also reduced for three months. That means another relief of 168 euros.

In contrast, families with two children but no car and an annual gross income of €150,000 receive a comparatively low €348. For singles with a gross annual income of more than 75,000 euros, there is 159 euros left over from the single flat rate of 300 euros for the price of energy. Due to the higher marginal tax rate, this is €61 less than for a single person with a gross income of €25,000.

According to his own statements, Federal Finance Minister Christian Lindner (FDP) assumes that it will take “a few weeks” before the relief decided by the coalition is implemented through appropriate laws.


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