Who should bear the greater tax burden in order to Germany facing an energy crisis and the exorbitant costs it entails? The people with the highest incomes are recommended by the so-called Five Wise Men, an advisory committee to the German government made up of leading German economists.

According to their proposal, published by the newspaper Süddeutsche Zeitung, by the spring of 2024, an increase in the tax burden on the highest incomes in Germany is expected, since an additional energy tax will be introduced for the same category.

Debt refinancing and social energy policy

The ultimate goal of the Five Wise Men’s proposal is an immediate refinancing of the public debt as a result of the extravagant aid packages of recent months, as well as an energy policy with a social mark in the interests of citizens who are now struggling to make ends meet.

According to the Five Wise Men, the German government’s inflation-fighting aid packages have the following paradox: they mostly burden low-income people. They therefore propose that the financing of these packages to overcome the energy crisis “should be tackled with greater social solidarity”.

So far, only 5% of all taxpayers are subject to the highest tax rate of 42%. According to the Five Wise Men, this speed can be increased.

And soon new changes in the government?

However, the new proposal adds fuel to the fire within the ruling coalition, given that the balance has been fragile for some time.

Interestingly, both the Social Democrats and the Greens supported the proposal to raise the tax rate for the “rich” even before the start of the war in Ukraine – it was even part of their election program. However, liberals, and in particular Finance Minister Christian Lindner, oppose such an idea.

However, in their proposal, the Five Wise Men seem to criticize Christian Lindner’s tax policy more broadly, supporting only his position on extending the operation of nuclear power plants.

Source: DV