989.8 billion euros of taxes – and the federal government is still planning a good 200 billion in new debt

In 2025 the federal government, the Länder and the municipalities took in 989.8 billion euros in taxes, more than ever before in euro terms. In 2008 it was 561.2 billion. That is 428.6 billion euros, or 76.4 per cent, more.^[1]

Even so, the federal government is planning a good 200 billion euros of new borrowing for 2027.^[5] And even so, every budget debate says the money is not enough for what is needed. I consider that the wrong question. The money is there. The question is where it goes.

More money, even after deducting prices

Anyone calculating fairly deducts prices. Consumer prices rose by 40.3 per cent from 2008 to 2025.^[2][3] After deducting that inflation, 25.7 per cent more tax revenue remains than in 2008. So the state does not merely have more euros. In real terms it has a quarter more money at its disposal.

Measured against economic output the rise is smaller. According to the public finance statistics the tax ratio stood at 20.3 per cent in 2010 and at 21.9 per cent in 2024.^[4] So the tax burden has not risen abruptly. Taxes have grown with the economy and somewhat faster than it. For my argument that is enough: in real terms the state takes in considerably more than it did seventeen years ago.

Grown most strongly: the Länder and the municipalities

The obvious objection is that little of this reaches the federal government. That is only partly true. Federal tax revenue has risen by 62.5 per cent since 2008, that of the Länder by 87.1 per cent and that of the municipalities by 96.0 per cent.^[1] The Länder and the municipalities are the levels that pay for schools, day-care centres and most of the police.

The money has arrived there too. Today 298,000 people work in municipal day-care centres, more than twice as many as in 2008. In the police it is 51,800 more.^[7] So it is not the case that nothing is spent on childcare and internal security. All the more pressing is the question of why, with this revenue, the state needs new debt on this scale.

Where the money goes

The state’s largest single item is social benefits, around 52 per cent of all public spending; their share has hardly changed in ten years.^[8] On top of that comes staff: since 2008, 970,000 more people have been working in the public service. I broke that down in my commentary 970,000 more in the public service since 2008.

For 2027 the federal government intends to spend 555.4 billion euros. In the core budget 118.7 billion euros of new borrowing are provided for, after a planned 98 billion this year. Including the borrowing of the special funds for infrastructure, climate neutrality and the armed forces it comes to a good 200 billion euros. By 2030 annual net new borrowing is to rise to 219.5 billion euros.^[5]

A state that takes in more than ever and still borrows this much does not have a revenue problem.

Who runs the budget

Responsible for this draft is finance minister Lars Klingbeil. He introduced it in the Bundestag in September.^[6] His biography names a degree in political science, work in members’ offices, a post as the SPD’s youth education officer, a Bundestag seat since 2009 and the offices of general secretary and chairman of his party. The finance ministry is his first government office.^[9]

That breaks no rule, and a minister does not have to be a businessman. But in any company one would expect a chief financial officer to have been responsible at some point for a budget of their own that they had to live within. I consider that experience a precondition one may expect of a finance minister. That is my assessment, not a fact.

What I expect

With revenue that in real terms is a quarter above that of 2008, the question is not where more money is to come from. The question is which spending falls away. Before the federal government takes on new borrowing, it ought to show what it has cut. And new taxes belong inside that calculation, not on top of it.

Andreas W. HerbFounder and CEO MBG Group, Paderborn

What I expressly do not claim

Taxes have not risen abruptly: in relation to economic output they have risen only slightly. The 76.4 per cent is an amount in euros, without deducting prices. The borrowing of a good 200 billion euros is planned and not adopted, and a large part of it is earmarked for infrastructure and the armed forces. The tax revenue belongs to all levels of government, while the borrowing concerns the federal government only. I do not claim that no money is spent on day-care centres and the police; the staffing figures show the opposite. That a finance minister without previous government office manages money worse is my assessment and is not documented.