LSAP to propose 2022 “corona tax”

"We have a deficit of €5.3 bn over the two years 2020 and 2021. Who will pay for this deficit?” asks Georges Engel. Photo: Matic Zorman / Maison Moderne

"We have a deficit of €5.3 bn over the two years 2020 and 2021. Who will pay for this deficit?” asks Georges Engel. Photo: Matic Zorman / Maison Moderne

Covid has been omnipresent during the past parliamentary year, but other issues are now emerging for LSAP MPs, including schools, housing and tax justice. The group’s president, Georges Engel, says that proposals will be made, notably for a “Corona tax”.

After a legislative year focused on the Covid-19 pandemic, LSAP parliamentary group chair Georges EngelGeorges Engel believes that we must now turn our attention to other issues, notably tax justice. Concrete proposals are expected concerning a tax on companies that have benefited from the crisis. But other issues will also be important, such as housing, schools and, of course, health.

Pierre Pailler: This parliamentary year has been dominated by Covid. Were you able to make progress on other issues?

Georges Engel: The focus has naturally been on the pandemic this year: we have passed 13 specific laws on Covid and some 50 related laws on the virus situation.

But we have also worked on other issues, such as housing, the Health Observatory, internal security, road safety and schools. We adopted the Housing Pact 2.0 and the new climate law. So many projects, besides Covid, have been debated in the Chamber of Deputies.

Taxation has been an important topic in recent months, I’ve noticed.

Throughout the year there has been a discussion about tax justice. As a party, we asked the finance committee to work on ideas for fairer taxation. We have heard from many people and in the autumn or early next year we will have a debate on tax justice—a very important debate for us.

Will the proposal for a tax on companies “winning” the crisis made by Minister Dan KerschDan Kersch (LSAP) and taken up by Minister Taina BofferdingTaina Bofferding (LSAP) be at the centre of these debates?

Of course it will. We have a deficit of €5.3 billion over the two years 2020 and 2021. Who is going to pay this deficit? Someone has to pay it and, for us, it is clear that it is not the poorest people, nor the middle class, nor the companies that have had a lot of difficulties following the crisis. It is certainly not the next generations. But who else? We have to take the money from where it is.

Now, there are companies that have made a lot of profit during this year—legitimately so. But because they have made a lot of profit, I think that this is a normal contribution to make to the wellbeing of society, to make it fairer and more equitable.

It’s causing internal discussions already, because we have to define who the winners are. We are discussing it and we will announce our proposals for fairer taxation towards the end of the year or at the beginning of next year. And the corona tax will certainly be part of that.

In the government, we have three parties, not just one. One may have an opinion, another may have a different one, but we have to find a consensus between three parties. If one party says “we don’t want to hear about the corona tax” and another says “we think it’s an issue”, then there’s still a third party that has to speak up. From there, it’s a matter of finding a consensus.

Beyond the corona tax, other tax levers can be activated: land, inheritance, wealth tax…

It’s clear that if we want to change something about the housing crisis, which is dramatic in Luxembourg, we have to take measures on taxes, either on speculation or on wealth.

When we talk about a wealth tax, many people think: they are going to take our house, our small plot of land. But we consider that one portion, a value of up to €2 million, will never be taxed. In that case, most people won’t be affected by such a tax. But for some, this tax will come into play, and that’s where we’re going to take the money we need for future generations.

So clearly there is taxation, but also the constitution, the housing situation, everything to do with work—working hours, teleworking—as well as measures about schools, which will be very important in reducing the gap that exists now and bringing more justice back to schools. Then we have to draw the consequences of the discussions around health, which started a few months ago, and on which we now have to move forward.