The German government wanted new help for workers. Companies should give their staff 1000 Euros. This bonus should be free of tax. The money should help with high energy prices. One reason for high prices is the war in Iran.
The Federal Council stops this plan now. The law did not get enough votes. Many states say no to the plan. They fear for their own money. The states lose much money without taxes. They expect a loss of 2.8 billion Euros.
The government wanted to pay with tobacco tax. Only the central state gets this tax money. The states and cities get no money. Politicians from the states call this unfair. Many companies also criticize the bonus. They cannot pay the money right now.
Chancellor Friedrich Merz and Minister Lars Klingbeil plan again. Maybe there is a new law soon. That could lower income tax for all. Experts talk about the next steps next week. The plan for 1000 Euros fails for now.
