Within Germany’s governing coalition, calls for reform of the inheritance tax are gaining momentum, igniting a debate over fairness and fiscal policy
Johannes Winkel, Chairman of the Young Union (CDU), argued for a focus on closing existing loopholes rather than raising overall taxes He highlighted perceived inconsistencies in the current system, specifically the differential treatment of inherited real estate versus inherited businesses, suggesting a need for greater equity
CDU Finance Politician Olav Gutting anticipates a forthcoming debate, fueled both by an expected ruling from the Federal Constitutional Court and fundamental questions of fairness He defended the existing privileges for business assets, while acknowledging the need to continually explain their rationale Gutting proposed exploring a flat-rate tax for business succession, but cautioned that a rate of ten percent, as previously suggested, could unduly burden companies
Meanwhile, the Social Democratic Party (SPD) is increasing pressure for higher inheritance taxes Wiebke Esdar, deputy leader of the SPD parliamentary group, described existing regulations as unjust, citing privileges enjoyed by large fortunes Her party seeks a revision of exemptions for business assets and a critical review of tax planning strategies utilized by foundations She acknowledged, however, that increased revenue from inheritance tax would not significantly alleviate the current budgetary shortfall, as the tax is levied by the federal states, not the national government
Frauke Heiligenstadt, the SPD parliamentary group’s finance spokeswoman, emphasized the need for a more equitable distribution of the tax burden She argued for relief for low and average earners and suggested that increases for the highest incomes and largest fortunes should not be excluded from consideration