What Merz Really Means When He Says We Should Work More: A Commentary
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TL;DR
Friedrich Merz wants to strengthen the state budget by increasing income tax and VAT revenues.
What Happened?
In the current political debate about working hours in Germany, Friedrich Merz has taken a clear stance1:
We need to work more and, above all, more efficiently in this country.
However, his demand for more work raises important questions:
Who Bears the Burden, and How Fair Is This Demand?
About 50% of shared taxes (€746.3 billion in 20252) consist of income tax and VAT. These taxes are primarily borne by the working population—that is, the middle and lower classes. The wealthy pay a 25% flat tax on capital gains (plus solidarity surcharge and, if applicable, church tax), but no income tax, as this is only levied on income from dependent employment.
Numerous exemptions, allowances, and tax planning options reduce the effective tax burden for the wealthy.
Businesses do not pay VAT on their inputs (input tax); instead, they only collect and deduct it from their own VAT liability.
Legal entities pay corporate and trade tax (around €100 billion annually2).
This means that income tax and VAT are the most important sources of state revenue, while wealth and corporate profits are taxed comparatively less.
In the end, this means: Merz wants to increase the pressure on the middle and lower classes and distract from the debate about a wealth tax (and the 4-day week). In principle, he is continuing Angela Merkel’s policy of the "black zero," which underfunded the social and healthcare systems and neglected infrastructure. Here, too, the middle and lower classes bore the brunt.
Wealthy individuals often have access to private social and healthcare systems and pay a lower tax rate on capital income than on earned income.
Why Does Merz Believe We Need to Work More?
According to a study by the Institute of the German Economy (IW)3, Germans work fewer hours per year on average than people in other industrialized nations. According to current data from the Federal Statistical Office and the IAB, the total volume of work in 2025 was 61.26 billion hours, with an average of 1,332 hours worked per capita4. The part-time employment rate rose to 29% for the gainfully employed (Destatis) and 39.9% for all employees (IAB).
This is often cited as an argument for longer working hours. But reality is more complex: Germany’s productivity per hour worked is high, and longer working hours do not automatically lead to more economic growth. Studies show that simply extending working hours without investing in innovation or infrastructure can even lead to misallocation of labor and medium-term productivity losses5.
Additionally, part-time and flexible work models play an important role for many people in balancing family, health, and leisure with work. Current tax and family policies encourage these models, while undermining gender equality and equal opportunity.
The employment rate for men is 65%, while for women it is 55% (Gender Equality Report 2025)6. The full-time employment rate is 87% for men vs. 50% for women (Destatis 2024). This effect is amplified when children under 18 live in a household: 92% of men work full-time, while only 32% of women do (Keller/Körner 2023: 94).
Conclusion
The demand for more work primarily affects those who already bear the majority of the tax burden. It is time to consider a fairer distribution of the tax burden—such as through a reform of wealth taxation or closing tax loopholes for businesses and the wealthy.
Merz’s politics are not only short-sighted but also unfair. Instead of further burdening the working population, the debate should focus on how the state can distribute its revenues more broadly and fairly. And how a work environment with equal opportunities for all can be created.
References
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