Schäuble told the upcoming issue of Der Spiegel magazine that if a compromise can be reached within Germany's left-right "grand coalition" government while respecting fiscal discipline, he would be willing to look at tax relief.
The latest calls for reform target a quirk of the German system known as "tax bracket creep" under which employees who get pay rises slip into higher tax groups, making their net pay lower than before.
"If there is room to manoeuvre in the budget and a shared desire by our coalition partners to tackle tax bracket creep then I am the last one who will stand in the way," Schäuble told Spiegel.
Spiegel said earlier calls by the co-ruling Social Democrats to finance such a move with a tax hike on earners in the highest bracket were now off the table and would likely be replaced by measures to close tax loopholes.
Germany's international partners have long called on the European economic powerhouse to rectify a dramatic trade imbalance by revving up spending at home.
The International Monetary Fund (IMF) said this month that "in Germany, an increase in investment, including public investment... not only is desirable on its own, but also will reduce the large current account surplus".
The IMF advice is in line with that of the European Commission and the Organisation for Economic Cooperation and Development.
Schäuble presented plans to parliament this month to achieve a consistently balanced budget from 2015, the first time since 1969, with the help of record tax receipts and low interest rates.
The veteran politician has spearheaded German efforts to impose swingeing spending cuts on the debt-mired countries of the eurozone.