A contribution from the North Rhine-Westphalian Academy of Sciences, Humanities and the Arts on Prof Dr Caren Sureth-Sloane
Hardly anyone knows more about taxes and their economic consequences than Prof Dr Caren Sureth-Sloane. The deputy secretary of the engineering and economics class has many ideas for the tax system and a vision for scientific work in her subject area.
When it comes to preparing her tax return, Prof Dr Caren Sureth-Sloane is like most taxpayers. "I like paying taxes, but there are only a few days a year when I'm in such a bad mood," admits the holder of the Chair of Business Taxation at Paderborn University. So perhaps it is also a little bit of self-interest that drives the expert to find solutions to this problem.
"A tax system should be simple," she explains. Tax complexity, including the time-consuming and nerve-wracking process of preparing a tax return, is a problem. This applies to both individuals and companies, whose taxation the expert is primarily concerned with. Tax complexity can have a detrimental effect on their willingness to take risks. Companies could therefore shy away from making certain innovative investments. In addition, tax complexity can also lead to people unintentionally or deliberately not complying with tax laws.
These are all undesirable effects of a tax system. The professor is investigating how these can be counteracted. "In many fields, we don't get the complexity out," she says. However, an international comparison - and here Germany is in the middle of the field - shows that a lot can be done in tax administration processes, for example. Caren Sureth-Sloane cites Estonia, with its almost completely digitalised administration, as a role model. "The tax forms there are all pre-filled with the latest figures. In the vast majority of cases, tax matters can be dealt with at the click of a button," enthuses the business economist.
Member of the German Research Foundation's Pandemic Commission
But why is it important that a tax system works well and that there are as few undesirable effects as possible? According to Caren Sureth-Sloane, it's not about particularly high tax revenues, at least not primarily. 'Functioning well' means that it creates framework conditions that contribute to social justice and at the same time strengthen the economy. This then leads to good incomes and good compliance behaviour and thus to adequate tax revenues. In a crisis such as the coronavirus pandemic, a good tax system can also help to keep companies that are temporarily in distress through no fault of their own in the market.
Caren Sureth-Sloane was a member of the Pandemic Commission of the German Research Foundation (DFG). She was one of the experts who spoke out in favour of extending loss carry-back. Loss carry-back means that companies can offset losses against profits that have already been taxed in the past. They receive an injection of liquidity that they would otherwise only receive at some point in the future. Loss carry-back already existed before the pandemic. However, companies were only allowed to offset their losses against profits from the previous year and the amount was limited. "Our proposal was to extend the period and increase the amount," explains the professor.
Politicians followed the proposal, but cancelled it again after the pandemic. The expert regrets this. In her view, the instrument also makes sense outside of the pandemic. However, politicians do not always listen to the recommendations of scientists. According to Caren Sureth-Sloane, this is basically okay. After all, politicians have to weigh up different interests and ultimately find socially acceptable solutions. What pleases the business economist is that the willingness of politicians and scientists to talk to each other has increased since corona. At the same time, she knows that this collaboration poses challenges for researchers. "We're honed to working thoroughly and therefore slowly," she explains. "During the pandemic, there was an immediate pressure to act. We had to provide answers, even if we couldn't be sure yet due to the limited data available."
Spokesperson for the first purely business-related Collaborative Research Centre
Delivering well-founded and relevant findings quickly is a particular challenge for individual researchers. It becomes easier when you do research together as a team. Like Caren Sureth-Sloane and her colleagues from the Collaborative Research Centre (CRC) "TRR 266 Accounting for Transparency". The tax researcher is the spokesperson for TRR 266, in which over 100 researchers are working on sensible rules for corporate transparency and a transparent tax system. It is the first purely business-related CRC and is revolutionary not only because of its content. "We were able to establish a research culture that didn't exist in our subject area before," says Caren Sureth-Sloane. While business administration was previously dominated by lone wolves, the CRC brings together researchers from different fields. There is also a separate project on science communication and "we have committed to making our data available to the general public," says the professor.
According to Caren Sureth-Sloane, it is possible for a group to do what is very time-consuming for an individual, such as preparing data collected over many years and then releasing it so that others can continue to work with it, or presenting highly complex research results in such a way that people outside of science become curious and engage with them. This would also create new opportunities for research, which would accelerate the progress of knowledge, but also serve to ensure that the public debate is better informed. The business economist wants to continue this culture, even if the SFB comes to an end in seven years at the latest. She would not have to play a leading role then. She would much rather coach a group of younger scientists to embark on this path. That is her vision, which she intends to continue working on during her upcoming research semester.
The portrait of Prof Dr Sureth-Sloane was commissioned by the North Rhine-Westphalian Academy of Sciences, Humanities and the Arts and has been published there.
