Conner Rousseau wants companies to pay 1 billion war tax

This Sunday, the socialists celebrate May 1, Labor Day. And this year, that day will receive extra attention. The absurd energy prices, sky-high inflation and the prospect of a long war period have left many workers on their lips. It was therefore written in the stars that the socialist politicians would put all kinds of demands on the table to encourage their electorate.

Vooruit chairman Conner Rousseau is already launching a first concrete proposal. He wants, among other things, to extend the VAT reduction on gas and electricity and to cement the extensive social energy rate, but money is needed for that. That is why the socialist wants to demand a ‘purchasing power contribution’ from companies that have enormously high profit margins. “For Vooruit, it is unacceptable that working people should lose purchasing power when there are companies that report high profit margins.”

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The socialists do not want to get the money from companies that are in trouble, but from a select few that earn a lot from the current crisis. Those who have made large excess profits would see those profits taxed at 35 percent. Normal profits will continue to be taxed at 25 percent. As a definition of excess profits, the socialists aim for 8 percent ‘return on invested capital’. That calculation has historical value, because “the Americans also used that threshold for an excess profit tax during the Second World War”.

Buffers

For Colruyt’s retail partners, who achieved a profit of 43.17 million in 2020, such a tax would amount to an additional contribution of 2.05 million euros, the socialists calculated. The company will then still have a profit of 31.98 million euros after deduction of other taxes. In total, the excess profit tax would yield 1 billion euros for the state treasury. An amount that Vooruit therefore has to return to the citizen through discounts on invoices. “That way we shift part of the war bill to those who have the buffers to absorb it,” says Rousseau.

Within the government, a headwind for this proposal is to be expected from the liberals. Prime Minister Alexander De Croo (Open VLD) said before the Easter holidays that protecting purchasing power is one of Vivaldi’s most important sites, but he also spoke about protecting the competitiveness of companies. That is precisely why the Prime Minister has set up an expert group in which economists must work out concrete proposals. It is unclear whether that group should only come up with proposals itself or will also investigate proposals, such as Rousseau’s.

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In any case, the expectation within the federal government is that there will be sessions of the core cabinet next week to discuss a new package of measures. There will also be discussed the requirement of the PS to intervene further on the energy bill. And therefore also the surplus profit tax of Vooruit. That will already be supported by the Greens, who have been trying for months to skim off the surplus profits of energy giant Engie.

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