What is being proposed for the Germany top tax rate?

Two ideas compete. The CDU wants the top bracket to start at €80,000, delaying higher marginal taxes. The SPD proposes a 47% top rate and is exploring social contributions on capital income. Both plans would be refined in drafting. Investors should treat them as scenarios until a final bill appears.

How could the income tax threshold change affect take-home pay?

If the threshold rises to €80,000, many above‑average earners would see higher net income because they avoid the top bracket sooner. If the top rate rises to 47%, high earners would likely pay more. Exact effects depend on household status, deductions, and whether capital income rules also change.

Will capital income contributions affect dividends and ETFs?

If adopted, social contributions on capital income would raise the effective tax on dividends, interest, and some fund distributions. Investors may shift toward accumulating funds or growth names, depending on personal goals and tax profiles. The final scope and rates matter, so watch draft language before making structural changes.

Could VAT increase to fund a higher threshold?

A VAT rise is one option if relief reduces revenue, though it is only one of several tools. Alternatives include spending cuts or closing loopholes. VAT is broad, so it affects consumers widely. Investors should monitor signals on funding to assess consumer demand, inflation paths, and sector margins.

Law and Government

Germany’s Top Tax Rate on February 17: €80k Threshold vs 47% Hike

ByDanny Kontos February 18, 2026February 18, 2026

Germany top tax rate is in sharp focus on February 17 as two opposing ideas set the stage for a major Germany tax reform. The CDU proposes lifting the income tax threshold for the top bracket to €80,000. The SPD argues for a 47% top rate and testing social contributions on capital income. Outcomes could reshape disposable income, equity taxation, and VAT choices. We map investor takeaways for paychecks, dividend plays, and Bund risk.