Moritz Schularick, president of the Kiel Institute for the World Economy, is advocating for a significant increase in Germany’s value-added tax (VAT). He proposes raising the VAT by three percentage points. Schularick intends the additional revenue generated by this increase to fund tax relief measures elsewhere in the system. Specifically, he suggests using the funds to lower social security contributions, easing the financial burden on citizens. The economist believes this shift will create a more balanced and efficient tax structure. This proposal seeks to redistribute the tax burden and stimulate the economy through reduced social contributions. The plan aims to offset the VAT hike’s impact on consumers with broader tax benefits.