Financial experts support the idea of ​​lower corporate taxes to stimulate economic growth and create new jobs.

Financial experts support the idea of ​​lower corporate taxes to stimulate economic growth and create new jobs.

According to a report by www.sueddeutsche.de,

The idea of ​​discussing lower taxes for companies is met with a lot of support in politics. Economics Minister Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) have discussed the idea. Experts like Veronika Grimm from the Advisory Council support the idea because lower taxes could create incentives for companies to invest in innovations, climate-neutral technology and new factories.

A possible reform would be to reduce the corporate tax rate from the current around 30 percent to 25 percent by reducing corporate tax from 15 to ten percent. However, this would also lead to a loss of revenue for the state, as corporate tax recently brought in around 40 billion euros per year for the state. A reduction of five percentage points would leave the state short of around 13 billion euros in revenue.

Financing such a tax cut is controversial. Possible options to offset the costs would be to increase other taxes, finance through credit, hope for economic growth to generate additional tax revenue, or cancel previous spending.

Experts are skeptical as to whether a reduction of five percentage points would be completely self-financing. Larger investments could generate additional revenue, but some of the reform costs would still burden the state. This could lead to savings having to be made elsewhere. A major tax reform is therefore a long-term and complex task that may currently be too big for the political coalition.