Germany raises tax-free minimum to €12,504, cold progression persists
Published 18 h ago1 sourceEvidence: Reported
The German federal government estimates that cold progression—where wage increases push taxpayers into higher brackets without real gains—will cost taxpayers €23 billion in 2026-27. This fiscal drag effectively raises taxes, potentially dampening consumption and growth. The report highlights a structural issue in Germany's tax system, with implications for fiscal policy and household incomes.
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