The left criticizes the taxation of pensions. How many people in Saxony-Anhalt have to pay taxes in old age and why is that?
Magdeburg (dpa/sa) – In Saxony-Anhalt around 204,000 pensioners are liable to pay taxes this year. That’s around 3,000 fewer pensioners than last year, according to the federal government’s response to a small question from the left-wing faction in the Bundestag.
In total, around 6,000 pensioners are exempt from tax due to the increase in the basic tax allowance. According to the Federal Ministry of Finance, the basic allowance in 2022 was 10,347 euros, for 2023 it was increased by 5.4 percent to 10,908 euros. Due to the pension increase, however, 3,000 women and men now also have to pay taxes.
“It’s good that thousands of pensioners in Saxony-Anhalt are no longer subject to tax this year. However, pension taxation remains a major nuisance for many. The level of pensions is falling even further,” said the parliamentary leader of the Left Party from Saxony-Anhalt, Eva von Angern, the German Press Agency. The federal government must protect small and medium-sized pensions from the tax office. “Increasing the basic allowance is not enough, if only because of inflation.” An increase to at least 14,400 euros is necessary.
“Contrary to widespread opinion, pensions are generally subject to income tax or wage tax,” says the German Pension Insurance website. Since 2005, the conversion to “subsequent taxation” has been underway. All expenses for old-age provision are thus increasingly tax-free. Pension income, on the other hand, is taxed. For pensions beginning in 2005, 50 percent of the gross pension was recognized as taxable income. Year after year this percentage increases.
The transition will take 35 years. Anyone who retires in 2040 or later will generally have to pay full tax on their pension. However, due to the basic allowance, not all pensioners actually have to pay taxes.
