Thursday, August 8, 2019

CO2 Tax Chatter in Germany

Lately, if you follow German news....there's been a lot of chatter about a CO2 tax.  The pro-environmental folks are hyped up about this and some folks were speculating that by December....it would happen.

Well....if you opened up Focus this morning (the German news magazine).....it's a curious twist to the CO2 tax idea.

Some tax experts went and analyzed the concept of a CO2 tax.

What they say is that the state (the federal folks in Berlin) can't invent a new tax like this, unless they rewrote the Constitution.

Taxes, you see.....MUST fit into existing tax categories.  This refers to income tax, car tax, VAT tax, dog tax, etc.  There is NO category that fits for CO2.

What'll happen now?  Well, you have basically two directions:

1.  You have to go and rewrite the tax deal in the Constitution.  It's not impossible or that difficult.  For those curious about it.....Germans don't make it a five-star once in a lifetime episode to change the Constitution.  However, this will be openly discussed, and there's probably over a hundred questions that the public would ask about this change to the Constitution.  I'm not that confident that Merkel and the coalition government really want to admit certain things about the tax.

2. Move forward and pretend it doesn't matter.  Just keep saying that it'll all work out and pat each other on the back once accomplished.  Then on day one.....some legal team will challenge it to the German Supreme Court, and find in twelve months that it was NOT constitutional.  Then they'd throw it out. 

If you look around, there just aren't that many CDU/CSU folks, or FDP folks....who seem to be positive about the CO2 tax.  The Greens and Linke Party seem super-positive, and about half of the SPD seem to be marginally pleased about the tax.  I think the Merkel plan will be to blast away and not cover the Constitutional part of this, and have the court dump it in 12 months. 


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