Under the current German tax system, a single person who earns 40,000 euros per year and gets a 2 percent pay rise could see net income actually fall due to bracket creep, which would result in an increase in taxes of 3 percent.
When asked how the government could make up for the four billion euros of lost income [under proposals to end die Bracket creep], [Economy Minister Sigmar] Gabriel said that the introduction of a minimum wage in Germany from 2015 would bring in new tax income and lower state costs for social welfare support.
"We'll have, for example, a giant reduction in expenditures and a giant increase in income thanks to the minimum wage," he said, referring to the 8.50-euro pay threshold that his party insisted on introducing as their price for joining a grand coalition government with Merkel.
"That'll mean more people are paying into the social welfare system with the minimum wage and that'll mean we're paying out less in social welfare spending. I believe we should give part of that back to the middle-income wage earners."Oh, was für ein verworrenes Netz wir weben ....