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A study commissioned by the Rosa Luxemburg Foundation, which is close to the Left Party, shows that a tax on companies’ additional profits caused by the crisis could result in large sums for the German state. According to the study, “revenues of 30 to 100 billion euros per year are possible”. The two authors describe the central arguments against an excess profit tax as “defence of the status quo motivated by ideological and distributional policies”.

The study was written by Christoph Trautvetter and David Kern-Fehrenbach from the Tax Justice Network. The Verdi trade union, the aid organization Oxfam and the anti-globalization organization Attac are among those involved in the network.

Trautvetter and Kern-Fehrenbach analyzed the profits of six major oil companies in the first half of 2022 compared to the same period last year, as well as the price increases for oil, gas and electricity since the start of the Russian war of aggression in Ukraine.

They set this data in relation to German consumption. Calculated over the year, this results in a crisis-related surplus of 38 billion euros in the oil sector, 25 billion euros in the gas sector and 50 billion euros in the electricity from nuclear power and renewable energies sectors.

The authors then calculated the government revenue using different tax rates: a tax rate of 25 percent would generate 28.3 billion euros, 50 percent would generate 56.5 billion and 90 percent 101.7 billion euros.

The authors rejected legal concerns, such as those raised by Federal Finance Minister Christian Lindner (FDP). “An excess profit tax is constitutionally possible and can be implemented in practice, as several examples from Europe show,” explained Kern-Fehrenbach. “Looking at Italy, Greece and Romania, which have already introduced an excess profit tax, the question arises as to why the federal government is still hesitates.”

Trauvetter added: “An excess profit tax has the potential to involve those who profited from the war in Ukraine in the costs of the crisis, which we all have to bear.”

Italy, Great Britain, Greece, Romania and Hungary, among others, have already introduced special taxes on crisis profits, and other countries are planning to do so. In Germany, for example, Federal Economics Minister Robert Habeck (Greens) and SPD leader Saskia Esken are calling for such a tax. Federal Minister of Finance Lindner is strictly against it.

In March, the EU Commission basically gave the green light for member states to “consider temporary tax measures on random profits and, exceptionally, decide to earmark part of these profits for redistribution to consumers”. However, “excessive market distortions” must be avoided.

In July, a report by the Bundestag’s scientific service classified the introduction of an excess profit tax in Germany as fundamentally possible. The state would therefore have to demonstrate that the companies concerned have made “undeserved profits” and that they can be determined. “In view of the obvious current developments in the energy markets, this does not seem impossible,” the paper said.