FDP parliamentary group leader: An excess profit tax would be a disaster for Germany

An empty ampoule lies in the Science Museum in London.

Right next to it is an equally empty syringe.

The two exhibits are reminiscent of Maggie Keenan's corona vaccination.

In December 2020, she became the first person in the UK to be vaccinated with the Biontech and Pfizer compound.

Since then, Biontech's vaccine has been used billions of times.

The Mainz-based mRNA specialist Biontech has risen to become one of the most valuable biotech companies in the world as a result of the pandemic.

Biontech is undoubtedly a crisis winner.

And so a company that was now threatened with a hefty additional tax would go to the Greens, SPD and even parts of the CDU.

The debate about the excess profit tax and a crisis soli, as recently called for by the CDU chairman Friedrich Merz, sometimes takes on grotesque features.

It does happen that relief is called for on Fridays and debits are proposed on Mondays.

Yet it is obvious that the best way for the state to relieve people was to take less of the money they had earned than to look for imaginative ways of giving something back.

Neither fair nor serious

Let's take a closer look at the excess profits tax: An excess profits tax assumes that profits in excess of the "usual" level are morally questionable and should therefore be subject to an additional tax, a kind of punitive tax.

This idea contradicts any market economy principles.

The legislature would have to arbitrarily decide which companies record above-average profits.

Determining what level of profit is "usual" and for whom it should apply would not only be difficult to determine, but also legally questionable.

Such an instrument can neither be fair nor serious, because how should the state decide on supposedly good and bad profits?

And what criteria define a crisis that allows such intervention in the taxation of individual sectors?

For many, it may sound tempting to tax crisis winners in particular.

But anyone who demands something like this sends a fatal signal to the economy.

The President of the Ifo Institute, Clemens Fuest, recently summed it up well: "Introducing special taxes for individual sectors depending on the economic situation opens the floodgates to arbitrariness and populism."

No one will deny that oil companies in particular are making high profits from the war in Ukraine.

There is no question that there must be sanctions if abusive price fixing occurs.

But it is not only mineral oil companies that benefit from the crisis, but also companies that promote renewable energies and are supposed to replace Russian raw materials.

Defense companies will make profits now that the Bundestag has decided on the special fund for the Bundeswehr.

And it affects innovative companies like Biontech.

Is it in our interest to tax these companies more heavily?

The answer is no.

We mustn't forget that Germany is already a high-tax country in which companies have to give up up to 30 percent to the state.

Higher profits are already more heavily taxed.

All those who call for a tax on supposed crisis profits forget what consequences this measure would have.

The excess profits tax recently introduced in Italy - a special levy levied on top of sales tax - actually poses risks for consumers, as it could easily be passed on to customers, thus defeating its original purpose.

Such an effect would also be conceivable for us.

The result: the horrendous energy costs would continue to rise.

In addition, we would have to be prepared to lose up-and-coming companies to other countries.

Young founders would also give us a wide berth in the future.

For Germany as a location, an excess profit tax would be a disaster, as we as a traffic light have decided to improve the framework conditions in order to become more attractive for investors and start-ups.

Despite all the headwinds, the FDP will continue to focus on growth and innovation.

Instead of discussing tax increases, we should provide incentives for companies to generate more tax revenue.

We should talk about how we can facilitate investment and planning acceleration.

We should talk about how to attract talent from abroad to tackle the skills shortage.

And we should talk about how we can make income tax relief with the abolition of cold progression.

The traffic light has taken important steps, for example in the implementation of permanent tax breaks or the accelerated expansion of LNG terminals.

We shouldn't put obstacles in the way of ourselves and our companies by getting lost in tax increase debates, but dare to make the progress that our country needs now.

Christian Dürr is FDP parliamentary group leader in the Bundestag.