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Thursday, September 29, 2022

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    Low earners need targeted support

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    Millions of people across the country need help. help in need. With immediate measures. The Federal Chancellor has just announced one, the reduction in VAT on gas for all consumers. Are there any? Some!

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    Caritas, Diakonie, Arbeiterwohlfahrt, social experts in the Bundestag – they agree: For example, there would be a direct discount on basic food for people on low incomes. Then, in addition to the adjustment of the commuter allowance, the introduction of a distance allowance. And the discussed moratorium to avoid mass shutdowns of electricity and gas in winter.

    Why? Help with the watering can, which leaves pensioners, students and trainees largely stranded, would be neither accurate nor appropriate. Say the social experts.

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    Because it has to be about taking off the brakes on everything that directly affects the everyday lives of millions of people. And the brake comes before everyone: the finance minister. There is an urgent need for a common understanding of how to overcome the crisis.

    Let’s take combating cold progression as an answer to rising costs – this is how Christian Lindner sells it, among other things. But it is all the more important to know that the cold progression is a general injustice in the tax system, the relief only prevents an additional burden. That’s right – but doesn’t help directly in the current situation. After all, an emergency.

    A moratorium is important because people on low incomes simply cannot pay the upcoming electricity and gas bills. No locks even when consumers fall behind on their payments. In order to avoid this, one could also use revenue from the value added tax from the planned gas levy for a one-off payment to low-income people.

    More on the energy crisis on Tagesspiegel Plus:

    Exempting the gas surcharge from VAT not only has advocates; because if you heat a lot, you will save a lot of VAT. As the economist Veronika Grimm said recently: There must be no compensation with the watering can, similar to the tank discount, which relieves particularly upper incomes.

    That is why the social experts are also calling for much more targeted support in the coming months. Otherwise the need will be overwhelming.

    Source: Tagesspiegel

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