High energy prices: This is how the traffic light could relieve the burden on citizens

Created: 08/18/2022, 10:00 am

By: Patricia Huber

High energy prices are affecting many households.

The federal government wants to remedy the situation.

What the third utility might look like.

Berlin – The gas price is higher than ever and continues to rise: From October 1st, the gas surcharge of 2.419 cents per kilowatt hour plus VAT will be due.

For private consumers, this results in additional costs of several hundred euros per year.

Chancellor Olaf Scholz (SPD) therefore wants to launch another relief package beforehand, if possible.

There are many suggestions:

Lindner's Relief Plan: Combat Cold Progression

Federal Finance Minister Christian Lindner (FDP) has proposed a tax relief package with a volume of ten billion euros, primarily to combat so-called cold progression.

The term describes the effect that a wage increase can be eaten up by tax progression and the real net income of an employee even falls.

48 million people are to benefit from the traffic light plans and be relieved by an average of 192 euros.

Concrete measures would be an increase in the basic allowance for income tax and a slight increase in child benefit and child allowance.

However, critics complain that Lindner's proposals would particularly relieve high incomes.

housing benefit reform

A housing benefit reform is considered a likely measure, but the details are still largely unclear.

Welfare organizations are calling for a significant increase and permanent adjustment of the housing benefit to the rent development.

The German Tenants' Association spoke out in favor of significantly increasing the income limit for entitlement to housing benefit - to a net of 5000 euros per month per household.

Basic child security and citizen income increase

Social organizations are calling for targeted measures to relieve low-income households, such as an immediate increase in the standard rate to 678 euros or the rapid introduction of basic child security.

Greens leader Ricarda Lang brought an increase in citizen money or another energy flat rate into play.

The direct payment is subject to income tax, so low earners benefit most from it.

From the left came calls for high one-off payments per household, around 1,500 euros.

Cancel or reduce the gas surcharge

The left criticized the levy as a "resounding slap in the face" for low-income households and called for its withdrawal.

Instead, the energy suppliers could be supported with additional income from VAT.

Because of the rising prices, an additional 60 billion euros would be collected from VAT this year alone.

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Union politicians such as CSU regional group leader Alexander Dobrindt are calling for a significant reduction in the levy after the EU Commission has prohibited the federal government from waiving the VAT on the levy.

Because of the rejection from Brussels, SPD and Green representatives are calling for at least the lowest possible VAT rate of five percent to be levied on the gas levy.

Energy tax cuts

The Federal Association of German Energy and Water Industries is calling for a general reduction in VAT on electricity and gas to seven percent for a period of two years.

The demand was joined by the SPD MP Hannes Walter and Union faction vice Jens Spahn (CDU).

Nine-euro ticket and fuel discount: continuation of previous measures

A continuation or further development of the nine-euro ticket is much demanded and yet highly controversial.

The crux of the matter is funding.

The transport associations also state that it would take more time to develop an alternative cross-association offer.

Business associations also spoke out in favor of continuing the tank discount, otherwise there would be a “price shock” in September.

Chancellor Olaf Scholz would like to further relieve consumers.

How exactly is not yet clear.

© Kay Nietfeld/dpa

Legal protection for tenants

Social organizations fear that tenants are threatened with electricity and gas cuts or terminations because of the high energy bills.

The Haus & Grund owners' association warned that landlords should not be left with the costs either.

You must be allowed to increase the heating cost advance payments immediately.

Otherwise, the owners would pay in advance in view of the massive price increases – many would then “simply be unable to pay”.

Leftists and unions are demanding energy price caps

Left-wing politicians and unions are calling for a cap on the price of gas for basic consumption.

Verdi, for example, called for the costs for the “normal consumption” of a family of four to be capped at 12,000 kilowatt hours at the 2021 level.

Excess profit tax: disagreement in the traffic light coalition

Demands for skimming off the profits of companies that are benefiting from the current crisis are increasing.

Several European countries have already gone this route.

In the traffic light coalition, the Greens and SPD are also supportive of this, in order to use the revenue to finance relief for citizens.

The FDP has so far strictly rejected this.