The struggling German population should be forced to pay a Ukraine tax to continue funding the war against Russia, a top economic advisor to the government has argued.
Monika Schnitzer, the chairwoman of the German Council of Economic Experts, an advisory body to the government known locally as the “five sages” of the economy, declared this week that a special tax to send money to Ukraine should be added to the already hefty income tax levied against to population.
Speaking to the Rheinische Post this week, the economic advisor said: “It is better to act now than when Russia’s aggression suddenly requires completely different measures.”
“Special events require special measures. A Ukraine solidarity as a surcharge on income tax for military aid would be a possible answer to this challenge,” she argued.
Schnitzer continued: “It’s not popular. But ultimately this war is also about our freedom. It seems necessary to me. It is better to act now than when Russia’s aggression suddenly requires completely different measures.”
The recommendation to introduce a Ukraine tax comes as the public already labours under one of the highest tax rates in the West, with single workers with no children in Germany having a tax wedge (taxes levied on the employee and employer) of 47.8 per cent in 2022, compared to the OECD average of 34.6 per cent and only trailing behind Belgium in Europe.
The German economy has been deeply impacted by the war in Ukraine, coming at the inopportune time during which businesses attempted to re-establish themselves after years of draconian coronavirus lockdown policies.
With the country experiencing high inflation, subpar international trade, and soaring energy prices, it is widely expected that once economic figures for the final quarter of the year are reported, it will be revealed that Germany is in a recession.
The poor state of the German economy has been felt by businesses during the Christmas season. According to the German Trade Association ( HDE ), a survey of 350 retailers found that 60 per cent were dissatisfied with holiday sales figures, compared to just 15 per cent who were happy with business leading up to Christmas.
Meanwhile, things may be going from bad to worse, with warnings of a real estate crisis as housing prices dropped by 10.2 per cent in the third quarter, alone, the fourth quarter in a row to see housing prices fall and the steepest decline since official records began in 2000.
Despite the economic calamities facing the country, the government has remained committed to sending hard-earned taxpayer cash to Ukraine and is set to double its commitments to 8 billion euros ($8.9/£7 billion) next year while slashing domestic spending.