Thursday June 10, 2021
Study shows positive effects
BDI demands fewer taxes for companies
How the economy creates the upswing after the crisis is likely to be a central question in the coming months. A reduction in corporate taxes would help, believes the Federation of German Industries – and refers to a study.
Against the background of the upcoming federal election campaign, the Federation of German Industries (BDI) has called for relief for the economy. A study by the Institut der deutschen Wirtschaft (IW) on behalf of the BDI comes to the conclusion that a reduction in corporate taxes would pay off for the business location. The “Handelsblatt” reports.
“The figures prove it: Tax cuts for companies in Germany, the highest tax country, are not only fiscally manageable, but also have demonstrably positive effects on economic growth,” BDI President Siegfried Russwurm told the newspaper. The lowering of corporate taxes would lead to “a surge in growth and would partly finance itself through additional tax revenues generated”.
“Not a gift for companies”
According to the report, the IW examined the effects of the BDI’s proposed reduction in corporate income tax from the current 15 to 10 percent and the complete abolition of the solos. Within ten years, the additional impetus for demand for capital and consumer goods would exceed the government’s shortfall in revenue by 33 billion euros.
The higher growth would also lead to additional government revenue, so that around a third of the reform would be self-financing. The number of employees would increase by 23,200 in the first five years. The gross domestic product would increase by a total of almost 28 billion euros over the first five years and by a good 57 billion euros within ten years.
“Tax cuts are not a gift for companies, but a decisive prerequisite for additional economic activity and investments in Germany,” Russwurm told the “Handelsblatt”. This increases the chances that Germany will grow out of its corona debts. An additional burden, however, could “stifle the hoped-for economic upswing”.
.