Dhe consequences of the coronavirus pandemic lead to huge government revenue shortfalls. Due to what is likely to be the worst recession in the post-war period, tax revenue will be a total of 98.6 billion euros lower than expected in autumn 2019, as the new tax estimate now published shows.
The federal government accounts for 44 billion euros in revenue shortfall, the federal states 35 billion and the municipalities 15.6 billion. “Despite the low revenue and all uncertainties, it is clear that thanks to the good budgetary policy of the past few years, the Corona crisis can be managed financially,” said Federal Finance Minister Olaf Scholz (SPD). The next step is to get the economy going again with targeted measures.
The situation looks even more dramatic for the entire period from 2020 to 2024. The state as a whole lacks 315.9 billion euros compared to the autumn estimate, including about 171 billion euros from the federal government. With the tax estimate twice a year, the experts from the federal, state and local governments as well as from the Bundesbank and research institutes lay the foundations for public financial planning.
“We got the bazooka out”
Finance minister Scholz announced in the course of the new tax estimate a rapid economic program to help the economy over this crisis. “At the beginning of June we want to adopt a comprehensive package of measures in the government – an economic stimulus package that should bring new momentum and new growth.”
Large investments in a modern and climate-friendly future should remain the guideline. “We have brought out the bazooka to stabilize the economy and social life,” said Scholz, referring to the government’s aid programs that had been decided so far. With the end of the restrictions and the easing measures that were introduced, the time had come for such an economic stimulus program.
Lars Feld and. React to the new tax estimate Marcel Fratzscher unanimously unanimous. The two economists warn of attempts to compensate for the lack of income by cutting spending or increasing taxes. “The state should not save after the crisis, but should now give expansionary fiscal stimulus,” said the chairman of the Economic Expert Council of the F.A.Z. Consolidation should only start when the corona pandemic is over and the economy is growing robustly again. “I don’t expect it until 2022,” Feld reported.
His colleague from the German Institute for Economic Research (DIW) coolly stated that government debt rose this year more than it has since the global financial crisis. “Even if it sounds paradoxical: only through government spending can the economic damage for companies and employees be limited and a restart of the economy can be guaranteed,” said DIW President Fratzscher of the F.A.Z.
Even after the financial crisis, the German state reduced its debts solely through strong economic growth and created many new jobs without increasing taxes.