Klingbeil criticizes ‘opposition within government’ in tax reform dispute

German Finance Minister Lars Klingbeil has warned that internal opposition could damage the coalition as he defends a tax reform proposal challenged by Economy Minister Katherina Reiche.

“Opposition within the government will ultimately harm everyone,” Klingbeil, the vice chancellor, said on the sidelines of a G20 finance ministers’ meeting in the United States. He said the government needed to work together, not only reach decisions jointly but also support them afterward.

Reiche, a member of the Christian Democratic Union, considers Klingbeil’s proposal inadequate. Her state secretary, Thomas Steffen, set out that position in a letter to the Finance Ministry and called for additional measures against cold progression, the effect of rising wages pushing taxpayers into higher brackets despite no real increase in purchasing power.

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Opposition within the government will ultimately harm everyone.

Klingbeil defended his draft as focused on easing the burden on families and people with small and medium incomes. He said that priority was personally important to him. His proposals to finance broader relief through higher inheritance and top income tax rates had been rejected by the coalition partner.

The coalition partners have nevertheless approved the draft bill, Klingbeil said. The cabinet is scheduled to adopt it the next day before it moves to the Bundestag, where changes remain possible. Klingbeil said he was open to amendments, but added that any additional relief would have to be funded.

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But the money would first have to be found.