Costs of the energy crisis: economics for a higher top tax rate

The federal government is trying to socially cushion the high energy prices with several relief packages. However, the measures are not targeted enough for the economists. They advise raising the top tax rate.

In view of the expensive measures in the fight against the energy crisis, the five economic wise men advise the federal government to increase the top tax rate. Alternatively, an energy solo for higher earners should be demanded, reports the “Süddeutsche Zeitung”, citing the annual report of the committee.

The economists wanted to make the government packages against inflation, which mainly affect people with little money, more social and affordable. The proposed measures would “increase the targeting of the overall package and signal that the energy crisis must be tackled in solidarity”.

Use nuclear power longer

Your report contains even more fuel for the traffic light coalition: It rejects Finance Minister Christian Lindner’s tax plans for cold progression and sympathizes with using nuclear power temporarily longer.

The five researchers explain that the government has decided on extensive relief, which is necessary because of the enormously increased prices. “However, it would have been helpful if the plans had been prepared much earlier,” the paper said, according to “SZ”.

Inflation hits those on the lowest incomes twice as hard

Previous measures such as the tank discount were often not very targeted and also benefited higher income groups to a large extent. If possible, the council only wants to see relief for households that cannot cope with the energy prices, i.e. in particular citizens with little money who “spend a significantly higher proportion of their income on rent and food than households with higher incomes”.

Many saved nothing and could not keep up their consumption when prices went up. Inflation hits the bottom 20 percent twice as hard as the top 10 percent. The economists Monika Schnitzer, Veronika Grimm, Ulrike Malmendier, Achim Truger and Martin Werding want to officially present their report on Wednesday.