German minister opposes taxation of ‘excessive’ profits

Germany should not tax “excessive” corporate profits made in the midst of an economic and energy crisis because it would interfere with market forces, German Finance Minister Christian Lindner said in an interview on Sunday. asked about the exceptional levies imposed elsewhere in Europe.

Italy and Britain are among those to introduce windfall taxes this year on energy companies that have largely benefited from limited fuel supplies as state coffers emptied during the coronavirus pandemic. COVID-19 and the costs of sheltering the poorest in society have increased.

“For me, a lot and maybe everything opposes a possible excessive tax on profits when I think about it closely,” Lindner of the Liberal Democratic Party told public broadcaster ZDF.

Photo: Bloomberg

“That would mean we would be offering our tax system to the arbitrary,” he said in the broadcaster’s summer interview series with politicians.

Britain introduced a one-off 25% tax on the profits of oil and gas producers in May to help fund household support.

Lindner said vaccine producers were rightly reaping high profits because their risks were high, and even if electricity supplies were tight, higher prices were the correct consequence to drive market responses.

Lindner referred to his EU-level initiative released on Sunday to try to scrap value added tax on a new gas tax, which Germany was due to announce yesterday, to spread additional energy costs more evenly.

“We do not want – and must ensure that the state does not benefit financially from this solidarity tax”, he declared.

He said he would stick to what he saw as restrictive budget spending as much as possible so as not to stoke inflation further.

Other members of Germany’s three-party ruling coalition have different views.

While German Chancellor Olaf Scholz of the Social Democratic Party said it would be difficult to impose windfall taxes, German Minister for Economic Affairs and Climate Action Robert Habeck of the Greens repeatedly demanded that “unearned and windfall profits” should serve society, not individuals.

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James R. Rhodes