Construction costs are currently skyrocketing

It’s very strange when you have to be satisfied with 6 Mbit DSL in the old, established residential area, and fresh fiber optic is laid 1 km away in the new development area "out in the fields." As a child of an infill lot, you feel a bit taken for a ride...

I don’t even know what we have. Anyway, it’s enough for 1x Netflix and 2x Teams at the same time.

Full inflation adjustments are unrealistic and also not sensible, as they only fuel inflation equally.

If there is 7% inflation, gross wages would have to rise by 14% to compensate 1:1. Everyone can consider how realistic that is.

Why is that? To offset 7% inflation, gross wages would strictly speaking only need to rise by 7%. (Tax class and progression disregarded for now)

Why is that? To compensate for the 7% inflation, gross wages would strictly speaking only need to increase by 7%. (Ignoring tax class and progression for now)

Then in doubt, you only have 3.5% more net income and thus still a 3.5% loss in purchasing power.

Why is that? To offset the 7% inflation, gross wages would strictly speaking only have to increase by 7%. (Tax class and progression now set aside)

You are already answering your question yourself—exactly for this reason:

(Tax class and progression now set aside)

When were tax rates last adjusted to inflation? Very rarely the basic tax allowance but otherwise? About 20 years ago! Since then, EVERYONE has been moving to a higher income tax burden every year.

Around 1984 you still had to earn four times the average income to pay the top tax rate on income tax, today only 1.8 times is enough.

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If we now had 10% more wages at 10% inflation, more and more people would climb the tax bracket tree up to the top rate. So these people would have not 10% more net nominally in their pockets but less, thus a loss in real wages.

Well, I think some people have made a classic percentage calculation error.

If I get a 7% salary increase, of course, I don’t just have a 3.5% increase net. You can’t start from the same base, that’s where the mistake lies.

Of course, roughly half of the gross amount remains. But what was transferred to my account before the raise was not my gross salary but my net salary. So if I want to know how much my net wage increase is, I have to calculate it based on the previous net wage.

Usually, that still doesn’t leave 7%. But that’s not because of gross and net, it’s because of progression, meaning that I pay more tax for higher income.

You can quickly illustrate this with an example.

5000 gross/month + 7% = 5350 gross/month

With tax class I and nothing special else, that results in about 2980 EUR net before the raise and 3159 EUR after the raise.

Difference 179 EUR.

179 EUR of 2,980 EUR (that is the previous net wage) = 6%

So yes, not 7% because of progression... but it’s not just half remaining. (based on the previous net)

Numbers are from a well-known online calculator....

Then in doubt, you only have 3.5% more net and thus still a 3.5% loss of purchasing power.

Well, you can't calculate it like that! Just take an online gross-net calculator and calculate it for yourself with a 10% wage increase. Depending on the initial salary, the net increase will be about 7 to 9%.