On April 15, 2026, the Bundestag held a first reading of a Green Party motion (Drucksache 21/5287, "Big Tech fair besteuern – Digitalsteuer jetzt") to impose a national 10% tax on the German revenue of the largest technology firms. Two days later, the Greens' finance spokeswoman Karoline Otte put numbers on it: roughly €19 billion in annual revenue, levied because, in her telling, large digital companies pay an "absurdly low" effective rate of 3.4% on profits earned in Germany. After the debate, the motion was referred to the Finance Committee (Bundestag press release).
The proposal is narrowly targeted. It would apply only to groups with at least €750 million in global annual revenue and €50 million in German digital revenue, covering online advertising, marketplaces and app stores, cloud infrastructure and data-based business models — Alphabet, Amazon, Apple, Microsoft and Meta by name (Bundestag textarchiv). It runs in parallel to a competing plan from Culture Minister Wolfram Weimer, who wants an earmarked levy to fund journalism and the creative sector. Otte's version differs in two ways: it hits total revenue rather than just advertising, and it routes the money to the general federal budget.
The case for the tax is real
It would be dishonest to wave this away as mere populism. The grievance is grounded. The Greens point out that traditional German businesses can face effective burdens approaching 30%, while platforms — through royalty payments, transfer pricing and the placement of intellectual property in low-tax jurisdictions — pay a fraction of that (Bündnis 90/Die Grünen). The party estimates Germany lost at least €15 billion in tax revenue to profit-shifting between 2016 and 2021. When a profitable firm books its German earnings in Dublin or Luxembourg and pays almost nothing where the value is consumed, the corporate tax base erodes and the playing field tilts against domestic competitors. That is a legitimate problem of tax design, and it deserves a serious answer.
The deeper issue is that the intended answer already exists and has stalled. The OECD/G20 Inclusive Framework's Pillar One was supposed to reallocate a slice of the largest multinationals' profits to the countries where their users actually are — precisely the gap Germany is complaining about. A coordinated, profit-based solution is the right architecture. National revenue taxes were always meant to be the placeholder, and the Greens themselves frame their motion as a "temporary transitional measure" pending an EU or global deal.
But a revenue tax is the wrong instrument
Here is where proportionality matters. A tax on gross revenue — not profit — is a blunt instrument that ignores whether a business is profitable at all. A cloud unit operating on thin margins pays the same 10% of turnover as a high-margin ad business. Otte cites an industry profit margin near 40% to justify the rate, but that average masks enormous variation across the very service lines the motion sweeps in. Revenue taxes are economically closer to a tariff than to income tax, and their incidence rarely stays on the intended target.
That last point is the practical one for German consumers and businesses. France's experience with its 3% digital services tax is instructive: studies of its incidence found the cost passed through substantially to advertisers, sellers and ultimately users, not absorbed by the platforms. A 10% revenue levy — more than three times France's rate — would predictably show up in higher ad prices for the Mittelstand firms that depend on these platforms to reach customers, in marketplace fees, and in app-store and cloud pricing. The tax aimed at five American giants would be partly paid by German SMEs.
The geopolitical timing is dangerous
The strongest argument against a unilateral move right now is external. On February 21, 2025, the Trump administration issued a presidential memorandum directing the USTR, Commerce and Treasury to investigate foreign digital services taxes and "determine whether to take remedial actions," explicitly reviving Section 301 investigations against countries including France, Austria, Italy, Spain and the UK (Skadden analysis). The same memorandum put the EU's Digital Markets Act and Digital Services Act on the target list. The US had already exited the OECD tax process in January 2025.
This is not hypothetical. The USTR's earlier Section 301 actions formally determined that DSTs in France, Austria, Italy, Spain, Turkey and the UK discriminated against US firms and authorized 25% retaliatory tariffs — suspended, but never withdrawn (USTR). Trade lawyers now describe an openly threatened tax-and-tariff confrontation (Steptoe). For Germany — an export economy whose automakers, machine-tool builders and chemical firms are acutely exposed to US tariffs — picking a unilateral fight over €19 billion could invite retaliation that costs the broader economy far more.
A better path
The fairness concern is valid; the instrument and the timing are not. Germany's leverage is greatest inside a coordinated bloc, not as a lone actor offering Washington an easy, discrete target. The proportionate course is to spend Germany's considerable weight reviving a profit-based Pillar One settlement, or failing that, building a genuinely EU-wide measure that the US cannot pick off country by country. A 10% gross-revenue tax, however emotionally satisfying, taxes turnover rather than profit, lands partly on German businesses, and hands a trade hawk in the White House exactly the pretext he has said he is looking for. The grievance deserves a remedy. This is the wrong one.