Burden sharing in the crisis: economists want to tax the rich more heavily

Who should shoulder what share of the high costs of the current crisis? According to a survey, a majority of economists think that the rich should pay more taxes.

Burden sharing in the crisis: economists want to tax the rich more heavily

Who should shoulder what share of the high costs of the current crisis? According to a survey, a majority of economists think that the rich should pay more taxes. However, the majority of them do not want to increase the top tax rate.

The majority of economists in Germany support a higher tax rate for very high incomes. Around 56 percent are in favor of raising the tax on the wealthy on annual incomes of 278,000 euros or more, according to a survey of 153 experts by the Munich IFO Institute. However, 52 percent of those surveyed reject an increase in the top tax rate, which has to be paid from 59,000 euros. "Contrary to what the name suggests, an increase in the top tax rate would not only affect those earning very high incomes, but would also put a particular strain on the middle class," said IFO researcher Marcel Traktor.

The top tax rate of 42 percent will take effect in 2022 for annual taxable income of more than 59,000 euros. The rich tax rate of 45 percent, on the other hand, applies to income over 278,000 euros. In their annual report, the economic experts had proposed temporary tax increases for top earners, triggering a heated debate. 46 percent of the economists surveyed by the IFO support a higher top tax rate, but 52 percent reject it. The two groups differ in their assessment of whether people with high incomes are already sufficiently shouldering the burden of the crisis.

According to the IFO, around 94 percent of supporters say that an increase in the top tax rate would improve the fairness of burden sharing in the crisis. Only 28 percent of the opponents see it that way. The inflation compensation law passed by the Bundestag, which provides for tax cuts to compensate for cold progression, is supported by 76 percent. "Public budgets are groaning under the additional spending of the past few years," said Traktor. "Consolidation is urgently needed."

52 percent of respondents support reducing public spending. On the other hand, 43 percent are in favor of tax increases. Suspension of the debt brake met with a similarly high level of approval at 37 percent. Only six percent are in favor of further extra budgets from Federal Finance Minister Christian Lindner.

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