Inflation: Handelsblatt readers support these relief measures

Should the participants in the “concerted action” get together again soon, the Handelsblatt readership would already have a few suggestions as to how the federal government could mitigate the effects of inflation.

A Handelsblatt reader writes: “In my opinion, freezing income tax and ending taxes on food and medicines would help.” The latter would primarily reach the needy, adds another reader.

In addition, some argue that the state should intervene in energy prices. One reader argues for the end of energy taxes, another thinks the government should also support policies leading to independence from fossil fuels.

All in all, many consider tax cuts in various areas to be particularly useful. In this way, “people’s problems can be counteracted,” says one reader. Another reader adds on this point: “If there is more net from the gross, households can cope with price increases much better.”

We have put together a selection for you from the various letters from the Handelsblatt readership.

Intervene in energy prices

“I don’t think state interference in collective bargaining etc. is expedient!

In contrast to consumer goods, as a private or business consumer you can only do without the energy supply in the form of gas or oil to a limited extent and are therefore forced to buy oil and gas at any price and also to pay the higher prices.

Only when the prices for gas and oil fall again will inflation also go down – in this respect the state should intervene in energy prices and support the consumers concerned in a targeted manner and take measures that lead to independence from fossil fuels as quickly as possible, more unbureaucratically and promote more effectively!

Since the installation of an air heat pump, for example, is still more than twice as expensive as the installation of a new gas condensing boiler, the installation still doesn’t pay off for me as a consumer, despite increased and possibly further increasing gas prices. In this respect, the procurement of the required materials should also be massively supported here in order to be able to serve the demand side and also bring the prices back to an adequate level.”
Michael Biederman

The only solution: raise interest rates sharply

“No, the government should stay out of everything and not support any group of people or companies. The only solution is to raise interest rates a lot and cut spending a lot. If some companies don’t survive, then you have to let them go bankrupt so that the market can be cleaned up.”
Jurgen Wachholz

Those who always preach water should drink it themselves

“I think freezing payroll taxes and ending food and drug taxes would do something. Likewise, the end of taxation on energy.

And parliamentarians could also waive some of their royalties in solidarity, and those who always preach water should drink it themselves. Happy future.”
Thomas Lamberty

>> Read about this: An evaluation of 600,000 receipts shows how much expensive groceries are a burden on German households

Keep the €9 ticket

“In view of the Uniper malaise and the cat-and-mouse game of the petrol station groups with their ups and downs in prices against motorists and Mr. Lindner’s ‘tax gift’, I recommend upgrading the Federal Cartel Office to an effective regulatory instrument in the energy market. In my opinion, this is where the greatest social explosive power lies.

Even the nine-euro ticket would have retained its charm as a 20-euro ticket; perhaps as a lasting inspiration for society from September 2022.”
Heiko FE Fortsch

Temporary government tax cuts make sense

“Temporary state tax cuts on food and everyday goods make sense, they reach those in need and lower the state quota. Expand the nine-euro ticket by the end of the year, which supports the new mobility mix.

That will do.”
Martin Hecher

No relief

“Personally, I don’t wish for any relief in relation to my person. My only wish is that there will be no further increase in income tax or contributions to unemployment insurance, long-term care insurance and pension insurance during this legislative period. Then I can deal with my wages.

The government should keep the money together, not take on any further debt and budget sensibly. That’s it.”
Thomas Vierhaus

Time to start and focus on the essentials!

“The good news: All countries are facing similar challenges in the current crisis management, as the main cause is global in origin: Pandemic-related disruptions burden the global economy with its supply chains and lead to inflation through shortages. For Germany, the shortage of gas supplies from Russia is aggravating.

In addition, but not independently, there are long-lasting megatrends whose positive and negative effects are becoming increasingly visible, such as digitization, automation, demographic change, urbanization, global climate change and geopolitical conflicts.

Just from the wealth of different developments, it is clear that there can be no ‘One Size Fits All’ solution, but only a canon of individual measures to be implemented in the short, medium and long term. And as is well known, responsibility for this lies in the hands of different players. It is important to coordinate measures and prioritize them according to their effectiveness and efficiency.

As an example, here are some dos and don’ts for short-term solutions by the state. Dos: Increasing the supply of energy in the short term to eliminate scarcity and thus reduce costs in companies and private households; Observe market economy principles, only framework conditions imposed by the state; Cut payroll taxes and benefits to help workers manage inflation; Focus on economically vulnerable population groups with tailor-made individual measures.

Don’ts: Adjust prices formed on the market through state intervention, as these then lose their control effect; Disregard collective bargaining autonomy: The negotiation of wages and salaries is and remains a matter for the collective bargaining parties; Entry into planned economy. Times of crisis are always opportunities for something new! In this sense, measures should now be tackled quickly.”
Sebastian Heckler

Make energy costs tax deductible

“Perhaps the state should think about making energy costs (gas, oil, petrol, electricity) tax-deductible for private households as well. Financial support could then only be granted to those who do not file a tax return (wage, income tax) or who make losses. Collective bargaining should be done in moderation.”
Reiner v. Haehling

The clamor for higher salaries

“I think the following relief makes sense:

Before the state screams for higher salaries, entrepreneurs’ taxes should be reduced! Without tax relief for entrepreneurs, an increase in salaries is hardly possible.

The crisis has hit us completely, the insolvency rate is increasing and more and more entrepreneurs have to register short-time work. How should it be possible for medium-sized companies to increase salaries at the rate of inflation.

The clamor for higher salaries from left-wing politicians (including the SPD) is loud, but the fact that this would lead to even more entrepreneurs getting into trouble is of course not considered.

With a temporary tax cut from income tax to tax on consumption, the problem of the people can be counteracted.”
Nico glasses

Please no short-term discount alms

“A government that wants to empower its citizens to take a stand against inflation in a self-determined way should enable higher wages and thus help limit losses in real wages.

A wage-price spiral is conditional. The fear of it remains unfounded if the state supports, for example, smart energy deals to expand the scarce supply of goods. Accompanied by the rising interest rates of the ECB, the money supply and thus also the overall economic demand will initially decrease.

So no short-term discount alms, please, but sustainable government support that deserves the name!”
Sebastian Duren

Noticeable increase in the basic allowance

“I am in favor of a noticeable increase in the basic tax-free allowance of EUR 5,000, since the increase in energy prices will remain in the long term and is also necessary for the desired climate change. One-off payments only help in the short term. Wage increases lead to an inflationary spiral.”
Hans Joseph Lauck

The government should hold back more

“I would wish that the federal government in Germany would hold back more. No ‘one-off payments’, no ‘nine-euro ticket’ and no ‘caps’ on any items (rent, gas, etc.). The state should simply reduce its expenditure and pass on the ‘savings’ to the taxpayer: Relief for value-adding employees and also entrepreneurs.

A reduction in the contribution payments for social security and the lowering of taxes (or the abolition of various types of taxes) would be the greatest help for the people in Germany. I do not want the complete abolition of the welfare state, on the contrary: really needy people (single mothers/fathers, pensioners, disabled people, etc.) should receive full support.

If more net remains from the gross, households can cope much better with price increases. The allocation of goods and money is better in individual hands than in that of a ‘planning state’.”
Benjamin Schumacher

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More: Last week, Handelsblatt readers reported on their problems at the airports and debated suggestions for improvement.