The idea of ​​asking crisis profiteers to pay is not new, but it is politically interesting - at least for the Greens.

They have been pushing for a heavier tax on corporate profits resulting from wars and crises for some time.

There are similar considerations in the EU Commission as well.

What is behind these proposals?

Is it basically feasible in practice what may sound morally convincing?

And is implementation in the traffic light coalition realistic?

Manfred Schaefers

Business correspondent in Berlin.

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Green party leader Ricarda Lang is one of the proponents of the concept.

"If it is obvious that some corporations are knowingly and, above all, making excessive profits from the horror of this war, then we should introduce an excess profit tax that actively counteracts this," she said after a meeting of the party executive earlier this week.

This is how everyone could get through this crisis well.

When asked whether this proposal could be implemented with the FDP and SPD, Lang replied: "We are experiencing a turning point, which means that there shouldn't be any bans on thinking in this turning point."

In the FDP, the initiative of the Green politician is not well received.

"I'm afraid that Ms. Lang's proposal has not been thought through to the end," said her parliamentary group leader Christian Dürr of the FAZ. Many companies have suffered badly from the pandemic in the past two years.

Now the effects of the war in Ukraine would come on top.

"Additional taxes would be downright toxic for the economy," said the FDP politician.

In addition, the state should never decide on profit margins, that is not its job.

"Basically, I think it's wrong to accuse German companies of enriching themselves from this terrible war.

That would not be a good sign in this tense situation,” said Dürr.

Difficult to determine who is making money from the war

Ifo President Clemens Fuest also thinks nothing of such considerations.

"For taxation purposes, it is simply not possible to determine whether individual companies are benefiting 'excessively' from a crisis situation," said the financial scientist of the FAZ only a compensation for the provision of capacities for crises.

In principle, the tax system works in such a way that companies with high profits make a larger contribution to tax revenue than companies that make low profits or losses.

Although there are also cases of anti-competitive behavior or even cartel formation, competition policy is responsible for this and can also impose penalties.

Friedrich Heinemann from the ZEW – Leibniz Center for European Economic Research considers the idea of ​​taxing excess profits to be “not well thought out”.

"If there are sudden shortages, for example now with microchips, armaments or food, higher prices and profits have an important steering function, they should provide incentives for a rapidly higher production on the supply side," said the FAZ economist prolong scarcity.

Due to very high selling prices, German farmers were currently among the temporary winners of the war and the food shortages.

"Put an additional tax on armaments companies with a profit boost, but not on farmers - that would be completely unsystematic from a tax point of view," said Heinemann.

Relieve the burden on the population through excess profit tax

The Greens initially brought up the idea of ​​an “excess profit tax” with a view to companies that were able to post extremely high profits in the corona pandemic.

Last March, Economics Minister Robert Habeck then spoke of wanting to examine whether “war profits” from companies could be taxed again.

At the end of April, EU Economic Commissioner Paolo Gentiloni suggested using particularly high tax revenues or excess profits from energy companies to provide more support to households, companies or road users affected by high prices.

The idea of ​​the excess profit tax is not new.

As early as the mid-1970s, the economist Dieter Brümmerhoff was concerned with the federal government's considerations of skimming off increased profits from German oil and gas production.

Already in the demarcation of excess profits he saw an almost insolvable problem.

In addition, the risks must be taken into account.

"However, since the assumption of risky investments is often of considerable importance for technical progress and growth, further effects can be expected here," he warned.