Future Tax Cuts: Why Self-Employed Should Not Speculate on Them

A Promise Is Not a Reserve

Anyone who runs a business or works as a freelancer knows the pattern from every election campaign: parties promise lower tax rates, income tax reform, relief on the solidarity surcharge, or simplified value-added tax. These tax promises sound tempting, especially when the current tax burden feels high. But there is a long path between a political announcement and an actual tax cut through legislative procedures, coalition negotiations, and budget debates. Anyone who bases their financial planning today on a promise for tomorrow confuses a statement of intent with a calculation baseline.

What Research Shows About Tax Promises

Behavioral economists Eiji Yamamura and Fumio Ohtake examined precisely this mechanism: people's willingness to accept different forms of tax burden, depending on their individual time preference (2026). They distinguish two forms of redistribution. In intertemporal redistribution, a current increase—such as in consumption tax—is traded for a proportional future reduction, which is the classic tax promise. In concurrent redistribution, by contrast, the tax burden shifts directly and immediately to other people, without detour through the future.

The key finding: the effects of time preference on both forms are asymmetrical. People do not evaluate a promise of future relief simply as a discounted version of immediate relief. They apply different mental standards to both scenarios. Those who think strongly in the present accept intertemporal redistribution differently than a purely rational discounting model would predict.

Why This Asymmetry Matters for Your Own Tax Burden

For the self-employed, this is more than an academic footnote. It means that tax promises for the future, from a behavioral economics perspective, are not simply a time-shifted copy of genuine relief. They are often communicated by politicians as if the equation is simple: pay more today, pay significantly less later. But this very exchange is subject, as the study shows, to distorted perception on both sides—among voters and among those who must ultimately realize the relief in actual terms.

Specifically, this means for your own financial planning: An announced tax cut is not an incoming payment that you can already plan around. It is a political intention whose implementation depends on majorities, fiscal condition, and economic macro-conditions—factors over which individual self-employed have no control.

The Global Context: Tax Burden Is Not Just National Policy

A second perspective is provided by the work of Ahmet Niyazi Özker (2025), who examines the tax burden and labor market dynamics of G7 countries compared to emerging economies. His analysis shows that tax burden and fiscal leeway in G7 countries are increasingly shaped by competition with growing economies. Tax policy is thus embedded in global economic shifts that escape the control of any single government. This is also a reason why a tax cut promised for the year after next should be treated with caution: it depends not only on political will but also on conditions that shift continuously.

Plan for Tax Burden, Don't Price In Tax Relief

What does this mean for practical financial planning? First, that reserves should always be oriented to the currently applicable tax burden instead of speculating on future relief.

• Calculate reserves conservatively based on the current tax rate, not on announced reforms
• Review tax advance payments regularly and adjust promptly if profits increase
• Incorporate political announcements into liquidity planning only after legislative passage
• For major investment decisions, don't wait for expected relief; calculate based on the status quo

Those who calculate their tax burden based on what applies rather than what is promised will not face liquidity shortfalls if the announcement ultimately comes to nothing. This sober approach is the logical consequence of what research shows about the difference between a promise and a payment.