German Social Democrats aim to tackle income tax reduction in 2026

By Andreas Rinke and Maria Martinez

BERLIN, Jan 8 (Reuters) - Germany's Social Democrats (SPD) want to bring forward an income tax cut for low and middle earners in Europe's biggest economy to 2026, according to a draft statement by the SPD parliamentary group.

The SPD and its senior coalition partner, the conservative Christian Democrats (CDU), are looking to accelerate tax relief in an effort to support the sluggish economy, but the two parties differ on priorities.

The SPD is framing its push as a matter of social cohesion and has proposed higher taxes for top earners and wealthy people, as well as a reform of inheritance tax, to help finance the planned cuts.

The CDU is also expected to reaffirm its support for income tax relief for low and middle incomes which was set out in the coalition agreement.

However, the CDU and its Bavarian sister party, the CSU, want to bring forward a planned cut in corporate tax from 2028 to 2026.

SPD parliamentary secretary Dirk Wiese played down prospects for that move.

"If I had to choose what is feasible this year, I would say we must prioritise this tax reform for low and middle incomes, for working people. If there is further scope, we will be happy to look at it," Wiese told RTL/ntv.