Germany’s stable economic growth of the past years has led to a budget surplus, which the newly-formed Grand Coalition now plans to use, for instance, to reduce the burden on broad levels of the population. Against this backdrop, the coalition agreement of the CDU, CSU and SPD involves a number of social and fiscal policy measures, which will be examined in terms of their distributional effects within the framework of this study. With the aim of estimating the extent of the distributional effects, the study determines the disposable income before and after the reform. Furthermore, the calculations made in the study are based on the assumption that all measures are introduced with immediate effect, even though their implementation is, of course, scheduled at a later date. The following measures are considered in the calculations: the almost total abolition of the solidarity surcharge, an increase in child benefit and the tax-free child allowance, the elimination of maximum income regulations for child supplements, the scrapping of nursery school fees, a reduction in unemployment insurance contributions, and the equal division of health insurance contributions between companies and employees. The study further examines the effects of a stabilisation of the pension level at 48 per cent, as well as the increase of the so-called “mother pension”.
Buhlmann, Florian, Eric Sommer and Holger Stichnoth (2018), Verteilungswirkungen der Reformpläne der Großen Koalition: Rentner und Familien sind die Hauptprofiteure, ZEW policy brief No. 18-02, Mannheim. Download