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Coal-fired power plants in Jänschwalde near Cottbus
Photo: Georg Ismar / picture alliance / dpa
If there is one word that German economists reliably gasp at, then it is »Übergewinn«, especially when the addition »tax« follows.
Anyone who thinks about introducing a special levy for energy companies in Germany along the lines of Italy or Great Britain must be accused of being either stupid or a communist or both.
And anyone who still doesn't give in will be overwhelmed with the entire catalog of relevant counterarguments.
It is said that profits have long been taxed in Germany.
Punishing individual sectors is arbitrary.
And who wants to decide when a profit becomes excess profit and what rate it should be charged?
The whole thing makes no sense and leads to abysses that only allow one conclusion: hands off the excess profit tax, at least in normal times.
In war, bad economic policy can be good policy
Only times are not normal.
Russia is bombing Ukraine and waging an energy war against Europe with the aim of dividing societies.
It has just throttled the gas flow again, with the corresponding consequences.
While skyrocketing oil and gas prices threaten to plunge millions of low-income earners into poverty, some companies in the sector are making staggering extra profits, as the balance sheets of many oil companies show.
This split is at the core of Putin's strategy.
Anyone who wants to counteract it intelligently, as the outgoing Italian Prime Minister Mario Draghi demonstrated, is possibly violating the firmly established canon of German regulatory policy.
But he is at least trying to defend himself against the Kremlin's economic attack - while the advice of most German economists amounts to giving free rein to the market forces manipulated by Putin.
In other words, bad economic policy can be good policy in war.
Here are the reasons:
According to studies, many households in Germany will have to spend additional four-digit amounts on electricity, gas or petrol in the coming year.
If that happens, millions of Germans on the lower levels of the income scale would be overwhelmed financially.
Therefore, the traffic light government must compensate for part of the price shock, as it has already announced.
Higher Hartz IV rates and more housing benefit alone are not enough, the government also has to pay generous energy aid for low earners, if only for reasons of justice.
This will require an amount in the double-digit billions, which under the conditions of the debt brake can only be raised through higher taxes.
In short: anyone who is against the excess profit tax must at the same time justify why they would prefer other taxes,
Moreover, Putin's gas war is flushing extra proceeds into the coffers of a number of energy companies, which, with the best will in the world, cannot be justified by superior entrepreneurial performance.
Example electricity: Because the price of electricity follows the price of gas under today's market conditions, the industry is characterized by an extreme two-class world as a result of the Putin war.
The few gas-fired power plants in the grid produce electricity for 300 euros per megawatt hour.
The operator of a hard coal kiln, on the other hand, only has to spend 200 euros, lignite plants cost around 100 euros, and for many green power plants the so-called feed-in tariff is also around a hundred euros.
For the electricity produced, however, everyone receives the same price of around 300 euros per megawatt hour;
and so large parts of the electricity industry are currently generating dream returns of 50, 100 or 200 percent, which can be traced back to nothing other than Putin's economic war.
In the current year, experts estimate, the extra income from wind and solar park operators and energy companies from RWE to Vattenfall will add up to double-digit billions.
Diverting some of this to compensate the millions who have lost out from energy inflation is undoubtedly redistributionalism.
But one for which there are good reasons.
In addition, Draghi's levy is much more cleverly constructed than most critics of the concept realize.
First, it applies only to the energy sector, that is, to the branch of the economy that Putin's strategy is aimed at.
Second, the special tax is not levied on excess profit, which is indeed difficult to ascertain.
But on the additional turnover compared to the previous year, which "avoids the difficulties in measuring the excess profit", as the scientific service of the Bundestag stated in a report.
The traffic light should take another look at Draghi's submission
The consequence is that many of the arguments put forward by the critics do not work.
Does the levy prevent investments in the energy sector?
Hardly, because the companies continue to rake in profits of exceptional magnitude.
Does it burden companies in crisis?
Rather not, because the tax authorities only intervene if the additional proceeds are large enough.
Does it damage the reputation of Germany as a business location?
Extremely unlikely, after all it has now been introduced by several EU countries and expressly recommended by the Brussels headquarters.
Of course, it would be extremely dangerous if the levy permanently violated the principle that every euro earned is to be taxed equally.
But that is definitely not planned.
The tax should only be collected once and subsequently, which has the advantage that the companies cannot raise prices in return.
But it would be an effective means of countering Putin's attack on the incomes of Europe's middle and lower classes.
In any case, it is more effective than a tank discount, some of which ends up with the mineral oil companies.
Fairer than the commuter allowance, which favors high earners.
Better than a price cap that takes away the incentive to save.
From this point of view, the traffic light government would be well advised to take a closer look at the Draghi levy.
Especially since it would fit well into the solidarity offensive that Chancellor Olaf Scholz is currently planning under the motto "You'll never walk alone".
The FDP should also rethink.
The liberals quickly rejected the Draghi concept because they are against higher taxes for fundamental reasons.
Soon, however, it could no longer be a question of whether taxes need to be raised in the anti-Putin fight, but which ones should be considered.
By then, at the latest, liberals should be asking themselves whether there shouldn't be a solidarity contribution from those who are most obviously benefiting from Putin's energy war.
Or, to put it in the language of party leader Christian Lindner: Better to tax properly than tax incorrectly.
By the way - the extra profits and special charges would be particularly high for the operators of nuclear power plants whose operating times would be extended.
So could more social balance be created through additional nuclear power?
The very question indicates a form of pragmatism for which there is hardly any place in the republic's politics, which are shaped by camp thinking.
