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The finance minister wants to participate in the election campaign with a wealth tax, and this mainly affects well-paid employees and officials. Therefore, a property lien is the wrong way.
It is so tempting that not even Finance Minister Olaf Scholz (SPD) can avoid it: an estate tax, that would be it! Starting next year, when it comes to who should pay the billions of dollars that are now piling up every minute, it makes sense to burden the wealthy, entrepreneurs and villa owners.
There’s only one small problem: Even a wealthy country like Germany doesn’t have enough millionaires to quickly pay off Corona’s debt. So in the end, with such a fiscal strategy, many will be found among the wealthy, who applaud the SPD’s ideas today.
This Thursday, for the first time in years, tax estimators will have very bad news for the Federal Minister of Finance, his colleagues in the country and the treasurers of cities and towns: tax revenues will plummet and probably also in the coming years. years. No wonder financial experts are baffled about how government revenues can be raised again despite the recession.
Tax increases are currently the wrong way
The finance minister’s push for rich taxes is a loving gift to his party, which is yearning for a new debate on justice. However, it is not reasonable: income and wealth tax increases are the wrong medicine in the current situation.
The maximum tax rate starts at just over 57,000 euros in annual income. More than 4.2 million taxpayers have recently paid it. These include higher education advisers in North Rhine-Westphalia, as well as mechanical engineers in Bavaria, craftsmen in Saxony, and senior police officers in service in Baden-Württemberg.
Because the little secret of the maximum tax rate is: it doesn’t affect the wealthy at all. It starts with those who earn only a third more than the average. But then it stops very quickly. The higher the share of income from assets, dividends and interest, the lower the general tax burden.
Higher tax rates are already overwhelming the middle class
For capital gains, only the flat 25 percent tax is due. While the really wealthy find strategies to increase their personal tax rate, employed employees and public officials are accused.
That will hardly change if the SPD wants to enter the election campaign by proposing an additional tax to offset crown charges. To get something like a critical mass for debt reduction, you could hardly turn off the progressive tax rate.
You cannot afford to forgive those who earn well but not very well. This is politically fatal. Because the wealth tax would also be charged to people who today cannot even buy a condominium in a good residential area in big cities. Being rich feels different.
Who is “rich” often does not feel this way
Even if the majority of Germans regularly accept an estate tax in surveys, this is no guarantee of enthusiasm if the plans are realized. Because most citizens do not consider themselves rich. They compare their standard of living with their friends and neighbors and generally conclude that others have more.
They hide the entire spectrum of income and wealth distribution. This was the only reason why, for example, Friedrich Merz, financial politician, income millionaire and candidate for the presidency of the CDU party, could consider himself among the “upper middle class”.
A wealth tax that deserves its name would inevitably result in the restructuring of the income tax progression zone. But this is so complicated and harbors so many risks to tax revenue that so far all federal governments have ultimately avoided real change.
The really wealthy would flee Germany
Even a real estate tax, another premium on the maximum income tax rate for the top one percent of taxpayers, wouldn’t do as much as expected. Because, unfortunately, these taxpayers are also the most mobile. Not only Russia, but also Great Britain, Switzerland and Ireland make good deals.
French President Francois Hollande at the time had to find out, who in 2012 imposed a wealth tax on annual income of more than a million euros. The additional tax was canceled three years later. He had hardly brought anything; Meanwhile, too many income millionaires had left the country.
Asset value is often difficult to estimate
Furthermore, the survey would be so complicated that it would consume a large part of tax revenue. After all, not only companies, stocks and equity portfolios would be reevaluated and evaluated annually. The value of images, rugs, alpine chalets, wineries, and vintage cars would have to be determined over and over again.
SPD tax dreamers are only right on one. If economic growth in the coming years is not enough to get out of public debt, there will have to be tax increases. The materially capable will feel this disproportionately. That is absolutely correct. Until then, discussions about tax increases are wrong. Which would be correct on a reasonable growth policy.
Ursula Weidenfeld is a business journalist in Berlin. Together with t-online.de and the Leibniz Association, he produces the podcast “Tonspur Wissen”.
