A prominent voice within the Christian Democratic Union (CDU) is publicly urging the party to reconsider its stance on inheritance tax, sparking a debate about fairness and the distribution of wealth within Germany. Dennis Radtke, head of the CDU’s labor association, argued in an interview with “Der Tagesspiegel” that the party’s focus on reforming welfare benefits (Bürgergeld) has overshadowed a glaring issue: the substantial amount of revenue lost annually due to loopholes in inheritance tax laws.
Radtke’s critique centers on what he terms a “problematic tax loophole” known as the “Verschonungsbedarfsprüfung” which currently allows for significant wealth transfers to occur tax-free. While acknowledging the CDU’s concerns regarding the potential impact on family-owned small and medium-sized enterprises (SMEs), Radtke insists the current system overwhelmingly benefits those passing on vast fortunes, far beyond the realm of the traditional Mittelstand.
“We, as the Union, would be well-served to look for loopholes in fairness not only when it comes to citizen’s income, but also elsewhere” Radtke stated. “Currently, the state knowingly and willingly forfeits billions on inheritance. This must end.
The Social Democratic Party (SPD) recently proposed a reform concept, which Radtke dismissed as misdirected, claiming it ultimately prioritizes burdening SMEs rather than genuinely addressing the problem of tax avoidance. He accused the SPD of prioritizing political optics over substantive reform.
The perennial concern within the CDU that inheritance tax reform would negatively impact the Mittelstand was directly challenged by Radtke. He sharply rejected the notion that individuals inheriting thousands of housing units or transferring multi-billion euro estates without paying substantial taxes could reasonably be categorized as belonging to the Mittelstand. “If someone who inherits a thousand apartments belongs to the Mittelstand, then Friedrich Merz and I are part of the precariat” he remarked, using provocative language to highlight the perceived absurdity of the argument.
Radtke’s intervention places significant pressure on the CDU leadership to re-evaluate its position. It exposes a widening rift within the party regarding economic fairness and raises questions about the long-term political viability of defending a system perceived by some as disproportionately benefiting the wealthiest segments of German society. The debate underscores a fundamental tension within the CDU – balancing the protection of traditional SMEs with the growing need to address wealth inequality.