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The sharp rise in energy and gasoline prices in Europe has revived the old idea of a tax on excess profit. German authorities are discussing the imposition of a special tax on oil concerns.
Considered an aid instrument to cover the high public needs in times of crisis and war, the excess profit tax is levied on profits that exceed ‘normal profits’ and is applied only once and not continuously.
Opinions differ on this issue but important institutions such as the Organization for Economic Co-operation and Development (OECD) support the imposition of such a tax.
The flag bearers of this idea in Germany have become the Social Democrats and the Greens, who argue that in the midst of this dramatic rise in prices from the war in Ukraine, those who have benefited most from the crisis should also be taxed more.
The idea of additional taxation for crisis beneficiaries was applied in the US and Great Britain during the First and Second World Wars to arms firms, and discussions about it returned during the pandemic, when additional taxes were demanded for companies like Amazon. who made dizzying profits in that period.
In October 2021, Spain became the first EU country to impose a special tax on energy companies, and Italy is also applying a special tax that only affects the energy sector.
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