The Federal Constitutional Court (BVG) has postponed its anticipated autumn ruling on the constitutionality of inheritance tax, a delay confirmed by a court spokesperson to the “Neue Osnabrücker Zeitung”. The decision, initially expected to shed light on a legal challenge brought by an heir contesting current exemptions for business assets in inheritance cases, will now remain pending indefinitely.
The case has reignited a broader political debate surrounding wealth inequality and the perceived unfairness of Germany’s current tax system. Julia Jirmann, of the network “Tax Justice” urged policymakers to abolish existing exemptions, arguing that the court’s ultimate decision should be a catalyst for a fundamental reassessment of German society’s values. “Do we want to perpetuate a system that favors inherited wealth, or do we aspire to be a true meritocracy?” she posited.
Jirmann’s critique highlighted the enduring loopholes and special provisions that disproportionately benefit wealthy business heirs, advocating for reform geared toward more equitable taxation of all assets. She expressed considerable confidence that the current framework is fundamentally unconstitutional, particularly given impending cuts to social programs, suggesting that the state’s indirect subsidies to the wealthiest families through inheritance tax exemptions are increasingly untenable.
The postponement comes amidst growing pressure for reform, with the Council of Economic Experts, a panel advising the German government, recently recommending a comprehensive overhaul of inheritance and gift tax to ensure a more level playing field for all forms of wealth. However, significant resistance to these proposals remains, with employer representatives voicing strong objections to any changes that could impact the transfer of family businesses. The deferral amplifies concerns that entrenched interests may be successfully obstructing meaningful tax reform, hindering efforts to address the growing disparity in wealth distribution within Germany.