In the traffic light coalition negotiations, all three partners agreed on clear guidelines for financial and budgetary policy: We will neither increase taxes nor introduce new ones. In addition, we will leave the financial policy crisis mode and comply with the debt brake again.

These commitments to the state’s self-restraint and solidity are not the result of arbitrariness and are not dependent on the political climate of the day. It has to stay that way. The call for more and more taxes and debts is also not helpful and ignores the real challenges facing our country.

In the face of inflation and the threat of stagflation, we need to take the pressure off prices, limit government subsidies, target relief to the most burdened citizens, and end the government’s reliance on ever-increasing debt. The state has to learn again how to use the money it has.

These are major tasks that cannot simply be brought about with more and more state economy. We will not be able to achieve economic growth, new jobs and better competitiveness with new and higher taxes.

After all, Germany has long been a country with the highest taxation, in hardly any other country do people and companies pay as high taxes as here. That is why the most recent calls for a so-called excess profit tax, for example, do not go far enough. In view of the actual complexity, this demand can almost be called populist.

Once drilled through: There is no clear, reliable and legally secure definition of what such excess profits should be. This creates major legal problems. For example, the principle of equality in the Basic Law could be violated because the same profits may be taxed differently.

There are also branches of the economy such as the solar and wind industries that also benefit from high energy prices. At the same time, a lot should be invested there. So should we also tax the profits there as well?

This also applies to companies in biotechnology, such as Biontech, or in the armaments industry, to companies like Rheinmetall or Diehl, which could benefit from rising armaments spending worldwide. Which industry is now allowed to make higher profits and which are not? The door is opened to arbitrariness.

This destroys trust in the state and can have a significant impact on investment decisions, with all the negative effects on jobs in Germany. In addition, new taxes can lead to shortages. So why shouldn’t multinational corporations simply offer their products to other markets that are less taxed?

This can lead to shortages, and prices will then continue to rise. If one thinks through the idea of ​​an “excess profit tax”, the state would also have to set maximum and minimum profit limits. So the state regulates everything. But that would no longer have anything to do with a social market economy.

Also, in the end, every tax is passed on to consumers in some way. In concrete terms, it would be a further burden for the citizens via detours. This is exactly what we want to prevent at all costs during the period of fueled inflation.

At the end of the day, this idea of ​​an “excess profit tax” that was quickly formulated but not thought through to the end remains the realization that not everything should simply be regulated by tax law. Ultimately, what we need is a cartel office that must ensure that market power is not abused. Attentive consumer advocates are also needed.

Instead of riding on the dead horse of an “excess profit tax,” we need to talk about truly targeted social projects that reach those who need them. An “excess profit tax” will not help, for example, the single mother with a small income, the educators in day-care centers, the craftswoman or the hard-working middle of society in general. A consistent compensation of the cold progression and the targeted relief of small and medium-sized incomes, however.

Our intention in the Federal Ministry of Finance is clear: the state must not enrich itself from cold progression. That would be a hidden tax increase, which also contradicts our commitment in the coalition agreement. The majority of the additional income from this year will be returned to the people, for which we have already passed two relief packages.

In a next step, it would be fair if there were higher standard rates for basic security for the coming year, a higher basic allowance and a new income tax rate. We will present proposals from the Federal Ministry of Finance after the progress report in the autumn.

In addition to these absolutely necessary measures, we should discuss a real tax reform that reaches the broad middle of our society.

Katja Hessel (FDP) is Parliamentary State Secretary at the Federal Minister of Finance.