23/10/2025 - "The current tax estimate shows once again: Germany urgently needs growth again and policies that enable it. Federal, state, and local governments cannot expect significantly increasing tax revenues until 2029. And this, despite the estimate being based on optimistic assumptions regarding economic growth in the coming years. While slight additional revenues of 1.8 billion euros for the current year and just under 5 billion euros next year are expected, there will be no cumulative additional revenues until 2029. Consequently, a significant financing gap in the federal budget remains, particularly from 2027 onwards.

The calculation is simple: When the economy stagnates, there is also a lack of tax revenues. And yet, Germany is expected to achieve the highest tax revenues in its history in 2025 – in fact, more than 1,000 billion euros are anticipated for the first time in 2026. The tax quota, i.e., the ratio of tax revenues to economic output, continues to rise and currently stands at 23.4 percent. This illustrates how much the state has expanded in recent years.

This is the core problem: Although revenues are increasing in public budgets because the state collects funds through ever more channels, government spending is growing even faster than revenues and also faster than economic output. Although expenditures for public investments are also increasing, they are predominantly financed through public loans. This alone will not secure the competitiveness of the location. The key now is to facilitate private investments, promote innovations and consistently reduce bureaucracy, accompanied by targeted government investments in transport, energy, and digitization.

Particularly because the state's financial leeway is becoming tighter, the government must clearly prioritize its expenditures. Growth and stability are not contradictory; they are mutually dependent. The federal government faces the task of combining fiscal discipline with economic dynamism through a consistent reform agenda and efficient use of funds.

The tax estimate is thus much more than a technical forecast. It is yet another wake-up call for a correction in economic policy: Only by considering growth, investments, and solid public finances together will Germany remain future-proof."