Kretschmer open to higher taxes for the rich – DIHK warns of weaker growth

Saxony's Minister President Michael Kretschmer is bringing higher taxes on large fortunes and inheritances into play in the debate about relief for lower incomes. At the same time, the German Chamber of Industry and Commerce (DIHK) is significantly lowering its growth forecast – and points to additional pressure from geopolitical risks and rising costs.

Kretschmer calls for more full-time work and links the question of performance and employment with the question of how relief can be financed. At the same time, the DIHK now expects economic growth of only 0.3 percent for the current year, after having assumed an increase of one percent at the beginning of the year.

Kretschmer: Tax increases only as the "last building block"

In an interview with the "Neue Osnabrücker Zeitung", Kretschmer said that "in the end, solutions would have to be found that benefit everyone." He cited job security and reliable tax revenues as examples. He explicitly did not classify his willingness to consider higher taxes on large fortunes and inheritances as a stand-alone measure: According to him, tax increases for the rich would only be the last building block of a comprehensive reform package intended to relieve lower incomes.

What is particularly striking politically is the bracket Kretschmer sets: More employment, relief, and state revenues are linked in one line of argument. However, it remains open which concrete instruments he understands by a "reform package," how large the relief should be, and which level – federal or state – would have the decisive levers. Thus, a direction is recognizable, but there is not yet a fully formulated plan.

DIHK: Forecast significantly down – risks from conflict and prices

The DIHK, meanwhile, is noticeably lowering its economic outlook. The organization now expects only an increase of 0.3 percent for the current year. DIHK Chief Executive Helena Melnikov referred in this context to the Iran war as well as to increased energy and raw material prices. For many companies, this "was the last straw," she said.

Even regardless of the specific trigger debate, the message of the new forecast is clear: The expectations of the economy have noticeably deteriorated within a few months. For companies, such a downward correction typically means that investment decisions are made more cautiously, cost and planning risks are rated higher, and the willingness to bear additional burdens – such as bureaucracy, levies, or uncertain framework conditions – decreases.

More pressure on viable concepts

A direct political connection between Kretschmer's statements and the DIHK forecast is not necessary – in effect, however, both developments reinforce the same pressure to act. If growth weakens, the debate about who should be relieved, who could bear additional burdens, and how the state stabilizes its revenues becomes more practical and contentious more quickly.

For employees, the main question is whether relief for lower and middle incomes will actually be achieved – and whether full-time work will be financially noticeably more worthwhile. For companies, it is also about competitiveness, costs, and the reliability of political framework conditions at a time when external risks are apparently having a stronger impact on the economy again.

What will be decisive is whether concrete, reliable proposals emerge from the political framework. Kretschmer outlines a line, but leaves implementation open. The DIHK, on the other hand, signals that the economic leeway is narrowing from its point of view. Both together indicate: The debate about work, relief, and financing is likely to become more intense – but nothing has been firmly decided yet.