The buzzword excess profit tax splits the traffic light coalition: Finance Minister Christian Lindner and his FDP generally reject the introduction of new or higher taxes, especially since nothing of the sort has been agreed in the coalition agreement.
Out of consideration for this, Chancellor Olaf Scholz (SPD) has announced that such an instrument is at least “not currently planned”.
But the SPD and the Greens are calling ever louder for such a special tax against companies that make high profits in crises.
Their party leaders Saskia Esken and Ricarda Lang have recently been heating up the conflict, sometimes with open taunts against the coalition partner.
Dietrich Creutzburg
Business correspondent in Berlin.
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As a rule, the callers have not yet explained exactly what such a tax should look like – on the grounds that the finance minister is responsible for detailed work.
And indeed: Recently there is a publication from the Lindner company, which does not come directly from the pen of the ministry officials.
However, the expert opinion of the scientific advisory board at the Federal Ministry of Finance on the excess profit tax definitely falls into the category of detailed work, albeit with an ultimately critical overall assessment.
The Economists' Advisory Board, which works independently of political guidelines, warns "to be very careful when using such popular, but in the long term economically dangerous excess profit taxes", as it says in the conclusion.
And on the 19 pages he lists a whole list of such dangers - not least for the innovative power of the economy, if investors no longer only have to calculate the risk of capital loss in the event of a failure, but also an extra intervention by the tax authorities in the event of success.
Avoid unwanted side effects
Nevertheless, the Advisory Board does not simply list counter-arguments in the report - it also outlines some quite astonishing connections between the current demand and the financial discussion about the requirements for good corporate taxation.
He summarizes them as follows: "Current plans for the further development of corporate taxation already contain elements of excess profit taxation." Behind this are technical considerations as to how profit taxation for all companies can be concentrated more on so-called net profit - because a tax assessment basis that is too broad has the undesirable side effect , distorting corporate investment and financing decisions.
In order to mitigate this, "in particular, an imputed interest on equity could be deducted from the tax assessment basis," writes the advisory board.
This would mean corporate taxation – in line with the ideals of finance and economics – would focus more on what is understood there as “economic rent”, net profit or excess profit.
This will "ideally lead to financing neutrality and better investment incentives," explains the report.
However, there are two points that separate this reform discussion and the current political debate, as the Advisory Board explains: "The associated reduction in the assessment basis would result in tax losses." In addition, such a reform concept does not amount to a targeted taxation of crisis profits.
Conversely, increased taxation of a somehow politically defined group of crisis winners has nothing to do with financing and investment neutrality.
"Fundamental steering effect"
The Advisory Council responded very fundamentally to the approach of the levy tax, which is popular with the SPD, Greens and social organizations: "Temporarily above-average profits have a fundamental steering effect in the market economy," he states.
This steers more resources, such as investment capital, to where there is a shortage and promises good profits.
"Taxing the above-average profits would prevent this diversionary effect and cement the scarce in the long run."
As an example from the Corona crisis, the report cites the initially high prices for face masks: the masks were scarce and expensive - but that was exactly what prompted many companies to switch to mask production.
If the tax authorities had cashed in the initially high profits of the first domestic manufacturers, masks would probably have remained scarce in the long run.
And in view of the high risk of losses, less investment capital would have arrived in vaccine research if there had not been the prospect of high profits for one or two successful companies in the end, so the warning.
On Sunday, however, the Green Party chairwoman Lang made a certain contribution to the specification: On ZDF she named the Shell oil company as a possible addressee of the excess profit tax.
Two things remain open for the time being: It would have to be clarified how the German tax authorities would access the profits of such global corporations.
In addition, such additional taxation could make fuel even more expensive - after the traffic light coalition has just made petrol and diesel sales cheaper as a price damper for consumers.