Soli in court: The court hearing

Solidarity surcharge in court: will the “solidarity surcharge” now be overturned?

On November 12, 2024, the time had finally come: the constitutional complaint against the solidarity surcharge, filed by six complainants, was discussed in a gripping hearing before the Federal Constitutional Court in Karlsruhe. The big question that looms over everything: Does the “Soli” in its current form still have a legal basis, or will it be declared unconstitutional? A ruling that could flush billions into the state coffers – or leave a huge hole.

Key question: Why does Germany still need the solidarity surcharge?

The focus was on the question of whether the solidarity surcharge is still constitutionally justified as a supplementary tax under Article 106 of the German Basic Law. The Ministry of Finance defends the “solidarity surcharge” and argues that there is still a certain need for funding in the new federal states. However, many experts and even some judges at the Federal Constitutional Court question whether this additional requirement is still real after so many years of reunification. Things got interesting when experts explained that the alleged “additional demand” for the East was already largely covered by the emigration of young workers – the taxes that were once supposed to be generated in the East are already flowing into the state coffers anyway, as many people work in the old federal states. A zero-sum game, so to speak.

Serious consequences of a ruling against the solidarity surcharge

Should the court overturn the “soli”, the federal government would face a huge budget problem. Around 50 billion euros would then be missing, and this sum would be a dramatic hole in the budget. A scenario that even the federal government’s lawyers warned against in their closing arguments. They brought an emergency resolution into play to solve the financing problem. However, the question of whether this will work remains open, as the Federal Constitutional Court has already rejected such a procedure as unconstitutional in 2023.

Disenchantment with politics as a side effect

This procedure is also a symbol of a deeper question: to what extent can citizens trust the consistency and fairness of politics? Although a decision against the solidarity surcharge could mean that the surcharge is only waived for the future, there is still the unpleasant aftertaste that money has been levied for decades without the necessity being legally secured. According to experts, this leads to a loss of trust and disenchantment with politics among many citizens.

What happens next?

The court will take its time to reach a final verdict, but the urgency is clear: the decision could affect the future of the solidarity surcharge and possibly the entire national budget. Whether the solidarity surcharge stays or falls will therefore not only make waves in the courtrooms, but also in public opinion.

What should you do?

Take a look at your tax assessment notice! If it states the solidarity surcharge, then submit the PepperPapers sample objection. This will keep all your rights open until the Federal Constitutional Court has ruled in the solidarity surcharge model case.