And it's happening again

Do you remember? 2008? The incantations? "Never again," they said, over and over. "Never again shall and never again will losses be socialized and profits privatized." That should have been the great lesson learned from the financial crisis. The grand promise.... And yet now it is happening again.

Sure, at that time the banks were the topic, the systemically important banks. And today? Today the taxpayers of almost all countries are trying to keep almost all businesses, almost all industries alive with unprecedented trillions, keeping them artificially ventilated, just as the respirators are doing in the intensive care units for Covid-19 patients.

But it is not all companies in all sectors that are in danger of going under without the trillions of taxes borrowed decades in advance. As in every crisis, there are winners too. And that's exactly what should not be.

Breaking records as far as ones eye can see.

Amazon, Zoom, Netflix, Zalando - almost all companies and industries whose business models are primarily based on the Internet have benefited to an unimaginable extent from the initial restrictions and the lockdown of large parts of public life.

In the second quarter of this year, Amazon's profits doubled to an unprecedented $5.2 billion compared to the same quarter last year. Profit, as I said. The tills also rang like never before during the second quarter for the German Amazon clone Zalando. Here, pre-tax profits rose by "only" 27%, but also reached a peak of a good 2 billion dollars. Almost as much as in the whole of the first half of last year together.

Amazon's gains/losses from Q1 2009 to Q2 2020 in millions of $USD. Source: Statista

Not only online retailers, but also the game industry, and especially the streaming sector, were doing well. Netflix increased its turnover in the second quarter by a good quarter compared to the previous year and also reached a record value of 6.2 billion in the comparatively young history of the company.

We are grateful!

To avoid any misunderstandings. We are very grateful to the online retailers and entertainment suppliers. Amazon provided us with books and household utensils while the shops were closed. Netflix cheered us up while the news program was rather depressing. For that, those companies who were far-sighted enough to invest in digital technology and provide capacity quickly and flexibly deserve gratitude and recognition.

Let's go to the balconies and give a big round of applause, as it has become common during corona times for systemically relevant pillars of society. And then let's sit down and see that this time not only the working taxpayers are called upon to save the economy, but also that those who have made very good money from the crisis contribute their fair share.

95% special tax on corona profits.

That would be the proposal. Companies should be allowed to keep 5% of the increase in profits in recognition of their contribution to the work during the crisis. 5% more profit, that is quite respectable in normal times anyway. But of every dollar and every euro that companies - in whatever sector - earned more in the first half of 2020 than in the first half of last year, 95% should be handed over and used to co-finance the economic rescue.
Monthly turnover development in mail order and internet retail in Germany from January 2018 to June 2020 compared to the same month of the previous year. Source: Federal Statistical Office, Statista

Sure, that alone will not close the gap that Corona is tearing in the budgets of countries and states, but it would be a contribution, it would have symbolic value. It would simply be just and fair.


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