Wealth tax: Germany loses billions every year

In Germany, billionaires do not pay wealth taxes – this was criticized by the authors of a recent study. Cavan Images / Getty Images

Billionaires in Germany face a lower tax burden than middle-class families, “Wirtschaftswoche” reports, citing a current study.

Accordingly, the reintroduction of a wealth tax could raise 73 billion euros in revenue annually.

The study’s authors propose tax reform for the super-rich to distribute the tax burden more fairly.

How many billionaires are there in Germany? Until 1997, this question was still easy to answer. Until then, rich people still paid a wealth tax and the federal government at least had official figures on its extremely wealthy people. Today, official statistics are lacking.

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The federal government no longer levies wealth taxes and according to a recent report, rich people are also taxed less than the middle class, reports ‘Business Week’. Various institutions from German-speaking countries collaborated on the research, including the German organization Netzwerk Steuerjustigkeit. “The research shows that the actual tax rates of the super-rich are well below the target maximum tax rates, while the middle class pays a larger share of their income in taxes and contributions,” “Wirtschaftswoche” quoted the study authors as saying.

Much of the billion-dollar fortune comes from family inheritances and real estate

According to “Wirtschaftswoche”, the researchers used publicly available data and model calculations for their analysis. In Germany, the top 0.1 percent is responsible for about 20 percent of net worth. A large part of the income of this group comes from family inheritances and real estate, a smaller part comes from working in family businesses or from dividends and profit distributions. Middle-class families, on the other hand, receive their income mainly from labor and pay higher taxes and social security contributions.

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In Germany, the reintroduction of a wealth tax could generate 73 billion euros in revenue annually, according to the organization that is also involved in the research with which Oxfam Germany is collaborating. In Switzerland, on the other hand, there is a wealth tax that accounts for seven percent of total tax revenue, as the “Taz” reported. The authors of the study, writes ‘Wirtschaftswoche’, call for a reform of the taxation of the super-rich to achieve a fairer distribution of the tax burden.