Panel discussion with Uli Klüh: Is our tax system fit for the future?

On 6 February from 19:00 to 21:00 a tax podium for sustainability will take place in the Haus am Dom in Frankfurt. Also present: Uli Klüh from the Darmstadt University of Applied Sciences.

So far, tax estimators have regularly revised upwards. Taxes are flowing, wages and profits are rising, the debt ratio is falling because GDP is rising. The call for tax cuts is growing louder. -> So is everything going well?

The current economic situation and corresponding tax revenues are due to the low interest rate policy, the current demographic phase and years of wage restraint in the lower third of incomes.

The unusually low interest rates will not remain so low in the long run. From the mid-20s onwards, the baby boomers will be out of the tax payers’ pay and will burden the coffers as pensioners. It burdens social cohesion when distribution, income and life chances drift apart, at least in Europe.

However, the challenge for the economy and society to cope with future challenges is even greater. Infrastructure needs to be rebuilt to cope with climate change and the rapid changes in modern technologies.

Subsidies that are harmful to the climate have grown in earlier and other social situations and make structures that are fit for the future more difficult. There are high investment needs in the energy sector, transport infrastructure, agriculture and digital infrastructure. Against the increasing drifting apart of life chances, a higher inheritance tax (upper 10% or similar) and instruments such as the “life chance credit” (St. Mau) would be an approach. (At EU level: strategy against intra-European undercutting competition and taxation of large Internet groups. – Question whether this does not need its own podium)

There is a need for effective pricing of climate-damaging emissions, be it via a functioning certificate trade with a lower price limit or a CO2 tax. (The latter would abolish or reduce itself with decarbonisation).

It is precisely because taxes are still bubbling over in abundance that we now have to change our course, because in a crisis situation many options for action and financial resources are limited. Because a CO2 tax would noticeably burden weaker incomes, directly or/and via consumer products, the lower incomes would be disproportionately relieved. The revenues can be used to relieve social security contributions. Demographic change will place increasing burdens on social security. Since the following birth-weak cohorts cannot compensate for this even with rising wages, it would be advisable to become less dependent on taxes on wage income. Would this also contribute to the stabilization of state budgets?

Lothar Binding, SPD finance policy spokesman
Damian Ludewig, former Managing Director of FÖS
Dr. Karen Pittel, Director of the ifo Centre for Energy, Climate and Resources
Dr. Ulrich Klüh, Economics with a focus on macroeconomics and economic policy at the Darmstadt University of Applied Sciences;

Where? Domplatz 3, 60311 Frankfurt, Germany

The flyer is available here.

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