Dispute over citizens’ income and excess profit tax: The traffic light coalition is heading for a stormy autumn – politics

Some coalition partners already believe that this government will not survive the winter. Anyone who asks around in the government district and in the Bundestag during this crisis-ridden summer break, which is not one, and simply asks what the mood is like, will always get one word in reply: “tense”.

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The SPD and Greens are particularly worried about FDP leader and finance minister Christian Lindner, as almost everything would be blocked; Frustration can be felt, little has remained of the progress alliance and departure.

The first are already thinking about a grand coalition as an emergency solution, but a Chancellor Olaf Scholz with a Vice-Chancellor Friedrich Merz then requires a lot of imagination.

At the last coalition committee, all unresolved questions were postponed until after the summer break, and now there are more and more. Starting with the debate about extending the nuclear lifespan, in which the FDP has more or less allied itself with the largest opposition party, the CDU/CSU.

In addition to all the technical questions, a Green party conference should also be a high hurdle. But there are other major issues that are all related.

Debt brake and excess profit tax

Energy companies in particular have recently made substantial profits from the rise in energy costs in the course of the Russian war. German gas suppliers such as Wintershall Dea also reported a profit of 1.3 billion euros in the first half of 2022, and RWE even 5 to 5.5 billion euros.

It is also controversial that gas customers are now supposed to indirectly pay for the billions in the rescue of the important gas trader Uniper with a high levy, which is to take effect from October 1st.

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So far, however, Lindner has insisted on a two-pronged approach: the debt brake should apply again from 2023, so he sees little room for further relief. At the same time, he rejects any form of tax increases.

SPD leader Esken wants to skim profits – the Greens too

Nevertheless, the SPD now wants to make a new attempt to introduce an excess profit tax for corporations “that enrich themselves from the crisis,” as party leader Saskia Esken told the “Neue Osnabrücker Zeitung”.

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“It is unacceptable that energy companies are making profits from the crisis at a time when the state is stabilizing gas suppliers with a solidarity price levy or even with taxpayers’ money. This is rightly felt to be a great injustice,” she explained.

Lindner warns, however, that such a levy would “open the floodgates to arbitrariness in the tax system”. The FDP repeatedly refers to the company Biontech, which has made huge profits through the development of the vaccine, but which in turn invests heavily in cancer research, for example.

The Scientific Advisory Board of the Ministry of Finance also warns of “arbitrary burdens and distortions” in the German tax system.

SPD sees crisis profits – without performance

Esken counters that companies without their own performance are benefiting from the crisis, it is an imbalance “that we have to get to grips with”. Several countries had long since introduced an excess profit tax. The petroleum companies have not passed on the full amount of the tank discount to the consumer either.

SPD faction leader Rolf Mützenich also wants to siphon off profits from the energy companies in particular – the most expensive power plant on the market is currently setting the price in the electricity sector for everyone.

This is usually a gas-fired power plant used to produce electricity. Due to the high price of gas, the electricity price is driven up significantly and also increases the profits for operators of coal or nuclear power plants, for example.

In crisis mode: Christian Lindner, Robert Habeck and Chancellor Olaf Scholz.Photo: IMAGO/photothek

Model Spain?

In the Tagesspiegel, the Greens politician Jürgen Trittin referred to other countries such as Spain. Now the Munich public utility company is already speculating on almost half a billion profits from extending the service life of the Isar 2 nuclear power plant.

“In Spain that would be taken away from them. The Spaniards get seven billion euros in revenue from their energy and mineral oil companies via the excess profit tax.” This would finance a state cap on the price of gas.

The parliamentary group leader of the Greens, Katharina Dröge, like SPD leader Esken, is increasing the pressure on the FDP. “People on low incomes are heavily burdened by the high prices for fossil energy and therefore need support,” emphasizes Dröge. An excess profit tax on crisis profits would be a fair way to fund them.

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So the last word has not yet been said here. In the ranks of the SPD and Greens, the FDP is accused of primarily relying on blockades, but in the end almost everyone knows that it will not work without further relief for the citizens, Chancellor Scholz has with his promise to the citizens – You’ll never walk alone – great expectations aroused.

But the financing is completely unclear. Trittin expects that Lindner will have to give in in the end: “This debt brake will not survive Christmas.” In the end, however, the whole coalition can hang on to the question.

The issue of citizens’ money – the SPD fears for their core project

Annika Klose is visibly worried. The Berlin member of the Bundestag is the rapporteur for the SPD parliamentary group on citizen income; For years she fought for this transformation of the Hartz IV system, that it becomes more humane, less bureaucratic – and with better advice for job seekers.

Now she is fighting all sorts of imbalances in the debate. The Union is talking about starting an unconditional basic income and that there should supposedly be no more sanctions, neither of which is true. The FDP, in turn, is clearly stepping on the brakes on the question of future standard rates, also because of the constraints of the debt brake.

Finance Minister Lindner also wants to relieve taxpayers in terms of cold progression – and the latest idea is to raise the saver’s allowance from 800 to 1000 euros, then, for example, share investors and savers have to give up less of their profits and interest income.

The Berlin member of the Bundestag Annika Klose insists on citizen income.Photo: imago/Eibner

Dispute about the height of the standard rates

The SPD, on the other hand, has other target groups in mind. Currently, the Hartz IV standard rate is 449 euros per month for a single person without children; Federal Minister of Labor Hubertus Heil (SPD) can imagine around 50 euros more – because of the consequences of inflation. So far, the expenses of the bottom 15 percent of single-person households have been used to calculate the rates, but there are many pensioners who have completely different needs and expenses than young people.

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Klose is in favor of the bottom 20 percent being taken into account in the future – and the rates being noticeably increased. “We can’t leave people sitting on the skyrocketing prices,” she says in an interview with the Tagesspiegel.

It bothers her that a picture of lazy unemployed people is being drawn again. “We should stop stepping down all the time, right now.” Instead of significantly higher rates, the FDP has now brought up the idea of ​​introducing a bonus for Hartz IV recipients who save on heating costs in winter.

Workers are needed everywhere – does better advice help?

The proposals, which are still based on the concept of former SPD leader Andrea Nahles, have not yet been drafted due to the coalition dispute, but Scholz has firmly promised the introduction of citizen income from January 2023.

Assets should then also be accessed less: In the first two years, citizen income should also be paid if the recipient has assets of up to 60,000 euros.

Another aspect is that there should be fewer sanctions, for example when appointments are missed or job offers are not accepted. The maximum reduction in benefits should be 30 percent. “The compromise is acceptable,” says Klose.

She would also like the advice in the job centers to be better and more personal. “In reality, there is often one employee for every 300 to 400 customers, and a ratio of 1 to 75 would be ideal.” But that also costs a lot of money.

Andrea Nahles will be the new chairwoman of the Federal Employment Agency (BA) from August – and she is counting on the…Photo: Daniel Karmann/dpa

The return of Andrea Nahles

Nahles, who starts this Monday as the new head of the Federal Employment Agency and can thus actively participate in the implementation of her core project, “overcoming” the Hartz IV system, emphasizes how important good care is right now.

Because the people are needed, which is shown by the manifold shortage of workers, “we need them all, specialists and helpers”.

Many left-wing parties in the SPD only approved the 100 billion special assets for the Bundeswehr because they thought that heart projects such as citizen money would come in return.

The situation is therefore becoming more uncomfortable for Chancellor Olaf Scholz, who is under pressure to deliver. In any case, Klose does not expect anything good for the fall: “It will be a tough fight.” Especially with the FDP.



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