The German government is exploring options to address a projected shortfall in the federal budget between 2027 and 2029, with a focus on ensuring a “fair overall package” that distributes responsibility across different segments of society. Finance Minister Lars Klingbeil, speaking to the Tagesspiegel newspaper, advocated for an increase in inheritance tax as a potential component of this solution.
Klingbeil emphasized a sense of societal fairness, stating that those with substantial financial resources should contribute appropriately. He highlighted the significant volume of inherited wealth in Germany, estimated between €300 and €400 billion annually, noting that individuals inheriting millions of euros often pay minimal inheritance tax. He argued that revisiting this taxation system would not have detrimental economic consequences.
The Finance Minister linked the issue of inherited wealth to broader concerns about opportunity and the perceived undermining of meritocracy. He pointed to the difficulty faced by individuals striving for homeownership in cities like Berlin, contrasting their struggles with the relative ease with which those who have inherited wealth can acquire property. Klingbeil expressed a desire to reinforce the principle that hard work and effort should be rewarded.
Beyond inheritance tax, Klingbeil also addressed concerns around the sustainability of the German social welfare system, specifically mentioning the need for “corrections”. He expressed concerns about individuals receiving state benefits while simultaneously engaging in undeclared work, characterizing it as a form of fraud against the general public. He underscored the importance of ensuring that recipients of social welfare benefits actively participate in the workforce.
The German government, comprised of a coalition, is reportedly aligned on the need to intensify oversight and accountability related to social welfare programs. Individuals receiving benefits who decline work or engage in undeclared work are likely to face stricter consequences. Klingbeil concluded by reiterating the historical role of the Social Democratic Party in advocating for societal change and reform.