Economist Lars Feld has suggested raising the commuter subsidy, arguing that this can be justified from an economic standpoint with the net principle and will not interfere with price formation. Speaking to the “Rheinische Post” (Friday edition), Feld proposed increasing the commuter subsidy to 45 cents per kilometer.
The former head of the Expert Council for Macroeconomic Forecasting views this measure as a quick way to provide relief, stating that citizens could feel the benefit even within the current year if they had it recorded on their wage tax forms. According to Feld, a one-cent increase per kilometer would relieve employees by approximately 230 million euros, leading to total state revenue losses of about 1.6 billion euros.
While Economics Minister Katherina Reiche (CDU) advocates for an increase in the commuter subsidy, Feld rejects the idea of a fuel price cap, as demanded by the SPD. He argued that a price ceiling and a fuel discount distort prices, which serve as signals to people that oil and gasoline are becoming scarcer. Instead, he believes that these price signals must be allowed to work so that demand falls and adjusts to the lower available supply. Furthermore, he pointed out that price caps and discounts affect everyone equally, leading to costly unintended consequences.
Feld is an economist from Freiburg who served on the Expert Council for Macroeconomic Forecasting in Germany from 2011 to 2021 and also advised Finance Minister Christian Lindner (FDP).
