A proposal for a supplementary levy targeting high earners in retirement, dubbed a “Boomer-Soli” (roughly translating to “Boomer Solidarity Levy”), has drawn sharp criticism from the German Taxpayers Association (BdSt). Reiner Holznagel, President of the BdSt, voiced his concerns to the Funke-Mediengruppe newspapers, acknowledging the need for discussions on the intergenerational contract and the distribution of burdens within the pension system. However, he argued that implementing another redistribution system within the insurance framework is misguided.
The proposal, initially floated by the German Institute for Economic Research (DIW), suggests a special tax on higher retirement incomes, with the collected funds allocated to individuals receiving particularly low pensions, thereby mitigating the risk of poverty in old age. This approach also aims to avoid placing further strain on younger generations through increased pension insurance contributions.
Holznagel contends that such a levy would create inaccurate incentives and constitute another attempt to undermine the fundamental principles of fairness and reciprocity within the pension system – a system where contributions are demonstrably linked to future benefits. He warned that this approach could stifle motivation, especially among skilled workers vital to Germany’s economy, potentially discouraging private retirement planning.
The BdSt President characterized the potential levy not as a “Boomer-Soli” but rather a “Prevention-Soli” implying it would damage individual initiative across all forms of retirement savings. He urged policymakers to focus instead on stabilizing the statutory pension system, advocating for a shift away from current initiatives, including maintaining a fixed pension level and expanding benefits for mothers.