economics
Location ranking: Germany is becoming less attractive
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High taxes and energy costs: Germany is becoming increasingly unattractive for companies. Scientists see an enormous need for action.
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Berlin. Whether with the Tax burden, labor costs or productivity: Germany is falling further and further behind in an international comparison of locations. In a current comparison of 21 industrial nations, it is slipping Germany three points down to 17th place. This was the result of the “Country Index Family Businesses”, which was published by the Center for European Economic Research (ZEW) on behalf of the Family Business Foundation during the Corona-Pandemie was created. In 2020, the USA, Great Britain, the Netherlands, Canada and Denmark are in the top positions. The study is conducted every two years.
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Germany only achieved a top score when it came to the subject financing. It is positive that both public and private Indebtedness are low, according to the study. In addition, the financing conditions are favorable. However, the academics of the Federal Republic of Germany give poor grades “for their passivity in tax policy” and in the areas labour costs and human capital.
This is largely due to the comparatively high corporate taxes. Also in the category energy Germany only lands in the bottom third of the country comparison. Although the energy supply is very secure, the electricity prices are also very high. According to the study, the digital infrastructure is now inadequate.
“In the past few years we have concentrated very much on the distribution of wealth”, analyzes Rainer Kirchdörfer, chairman of the foundation family business. “Now it is urgently important to make Germany more competitive. We have to catch up in the tax competition, reduce energy costs and get into the inadequate Infrastructure invest.”
USA occupy the top position
The USA has meanwhile worked its way up to the top position in the overall ranking. According to the study, the one that came into force in 2018 is largely responsible for this Tax reform. For example, it envisaged a reduction in corporate tax rates at the federal level from 35 to 21 percent. They are outstanding United States also in the areas of regulation, finance and energy. Britain, meanwhile, is suffering from the uncertainties caused by Brexit. The weakening of the rule of law is in turn reflected in a poorer performance of Poland and Hungary.
Scientists see an enormous one Need for action. “The country index makes it clear that Germany is now lagging behind its European and American competitors with regard to the tax burden on companies.” The ZEW study continues: “In order to remain competitive in the long term from a tax point of view, a comprehensive tax reform in Germany will be essential.”
Also interesting: Comment: Do not save the country after the Corona crisis
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