Research of ARD contrasts
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Greens and leftists are calling for a special tax for corona profiteers
03/18/21 | 4:56 pm
Closed stores and plummeting sales: The pandemic has brought many companies to the brink of ruin. Others were able to dramatically increase their profits during the crisis. This is one of the reasons why many are calling for them to share in the costs of the pandemic. By Efthymis Angeloudis and Silvio Duwe
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The spring collection was delivered and the store reopened after a long break. But even if Click & Meet again seems to offer the UVR fashion company at least a small perspective, the fashion business in Schöneberg could hardly survive without government aid.
“We are definitely grateful for everything we got,” says the managing director Anja Schieber. “And we are satisfied when we survive the crisis.” Whether the UVR fashion company can do this also depends on the amount of the bridging aid. It would have to be over 50,000 euros. But if the money doesn’t come, Schieber will at some point no longer be able to pay bills.
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Public debt at record levels
But whether it is emergency aid, bridging aid, short-time working allowance or tax assistance law – the money has to come from somewhere. A total of around 1.5 trillion euros – this is how high the Federal Ministry of Finance estimates the total cost of the corona pandemic for the state budget. The cost of the aid for companies, which is necessary due to the economic restrictions to protect against the spread of the virus, is over 150 billion euros. Due to the enormous corona costs, public debts in Germany have grown to a record level of 2195.1 billion euros – an increase of 15.6 percent compared to the end of 2019. Who should foot the bill?
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Greens and leftists are calling for excess profit tax
The costs should be borne by companies that made particularly high profits in the Corona crisis, says the financial policy spokeswoman for the Greens, Lisa Paus. The concept is called excess profit tax and provides for the taxation of particular profit increases that have arisen due to a crisis situation. This could affect a company like Amazon, which was also able to increase its sales in Germany by around 33 percent to 29.5 billion euros in 2020 due to the closure of the retail trade.
The state could use this income to refinance debts that arose through emergency aid, short-time work benefits and bridging allowances. “I think it is right and important that those who have benefited particularly from this crisis also make their additional contribution,” said Paus. This is not only important for reasons of justice. Even after the crisis, these corporations would have a competitive advantage.
Paus receives support for this proposal from the financial policy spokesman for Die Linke, Fabio de Masi. In an interview with Kontraste, he explained that he could imagine using an excess profit tax to skim off abnormal profits from corporations like Amazon, which are primarily concerned with the corona crisis.
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Economists: Can’t do without tax increases
An excess profit tax is easy to implement, says Christoph Trautvetter, head of the Tax Justice Network. At the same time, the network points out that such a special tax can only be part of a more comprehensive corporate tax reform. Because the biggest winners from the crisis are international corporations that are already calculating their profits with the help of complicated company structures and tax havens and thus reducing their taxes.
Objections come from the other parties represented in the Bundestag. The CDU / CSU and SPD as well as the FDP currently see no need for additional taxes in order to cope with the costs of the crisis. They are betting that the corona debt can be financed through future economic growth.
Economists warn against relying on growth alone. “We have a lot of catching up to do with infrastructure, digitization and climate protection,” warns Stefan Bach, who is responsible for taxes and public finances at the German Institute for Economic Research. “And of course none of this goes together if you want to forego tax increases at the same time.” In addition, it is by no means certain that economic growth after the pandemic will continue as it did after the financial crisis in 2009.
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Amazon adds up tax and social security contributions
On the other side of the shop closings and bankruptcies are the corona winners: retail companies like Amazon that have been able to maintain and even expand their business operations. As a crisis profiteer, you could help finance the costs of the pandemic if you were to be taxed.
The US group has paid almost no taxes in Germany for years. The so-called permanent establishment regulation has existed since 2015. Because Amazon also operates warehouses in Germany, part of the profits must now also be taxed here. Companies often post their profits where, for example in Ireland, the tax rates are particularly low, although they generate the associated sales in Germany, for example.
The group itself gives 261 million euros in tax levies in Germany for 2019. But he mixed the number with social security contributions for employees and even customs duties. It is not easy to find out how many taxes Amazon paid in Germany in this way. To do this, the share of social contributions would have to be stated.
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Employees in the red, shareholders with profits
Gerhard Schick, head of the citizens’ movement Finanzwende and former member of the Bundestag for the Greens, reminded Kontraste that taxpayers had to pay for the bank bailout as early as the 2009 financial crisis. He sees parallels to the Corona crisis. When large companies are rescued with taxpayers’ money, not only the employees benefit, but also the shareholders in particular. Schick therefore calls for a “dividend lockdown” for companies that have benefited from short-time work benefits. Otherwise there would be the imbalance that at the end of the crisis year 2020 the employees would have a minus due to short-time work, while the shareholders made profits.
One example of this is the automotive group Daimler. This saved 700 million euros last year through the short-time work allowance. At the same time, the group was able to increase its annual profit by almost 50 percent. The Daimler Group is also planning to increase the dividend for its shareholders by 400 million euros to a total of 1.4 billion euros.
The major shareholders, above all the Kuwait sovereign wealth fund, Renault-Nissan and the Chinese investor Li Shufu, would benefit from this. The state was allowed to pay for this in the form of short-time working allowances and purchase premiums for electric and plug-in hybrid cars – and thus all taxpayers.
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