The Social Democratic Party (SPD) is pushing for a significant overhaul of Germany’s inheritance tax system, targeting loopholes that disproportionately benefit the wealthiest individuals while aiming to alleviate burdens on smaller businesses. SPD General Secretary Tim Klüssendorf emphasized the party’s intention to ensure the planned reforms do not negatively impact small business owners inheriting operations, but asserted a pressing need to address the current system’s inherent inequalities.
Klüssendorf highlighted the paradox of a system where the “highest inheritances and gifts” often escape taxation altogether. He criticized the existing exemptions, particularly concerning company assets, arguing that they enable extremely wealthy individuals to effectively avoid inheritance tax. Currently, he noted, those inheriting over €26 million in company assets can circumvent the tax through a special regulation.
The proposed changes represent a shift in SPD policy, reflecting a broader political climate increasingly sensitive to wealth inequality. While acknowledging the importance of protecting family businesses, Klüssendorf stressed the need to rectify a situation he described as “extremely unfair”. The suggested reform isn’t solely about increasing tax revenue; it’s framed as a measure to improve perceived fairness within the German tax landscape.
While the intention is to protect smaller and medium-sized inheritances, potentially through adjustments to existing tax-free allowances, the core focus remains on dismantling the current exemptions that shelter vast wealth. The SPD envisions a “package deal” that strikes a balance, fostering economic stability while tackling what they see as a critical injustice in the national tax code. This move could trigger resistance from business lobbies and conservative factions advocating for tax breaks for wealth and capital, potentially setting the stage for a contentious debate within the German parliament.