A prominent German economic advisor is advocating for a crisis levy on the country’s top seven percent of earners to avert potentially devastating social cuts amidst a looming fiscal shortfall. Achim Truger, a respected voice in German economic policy, argues that such a measure is necessary to offset rising expenditure in areas like defense and the impact of lower corporate taxes, projecting a €200 billion budget gap by 2029.
Truger’s proposal goes beyond the existing recommendations from the Council of Experts (Sachverständigenrat), which previously suggested increased taxation of inherited wealth from company founders. The latter proposal already met considerable resistance, illustrated by a dissenting opinion from Council member Veronika Grimm, who labeled the entire discussion as “reckless.
Defending his more aggressive suggestion, Truger criticized what he characterized as undue deference to family-owned businesses. He highlighted a perceived imbalance where substantial business assets are taxed at minimal rates, or not at all, contrasting it with scenarios where smaller inheritances face significantly higher rates. “It’s a perversion when someone inheriting €150,000 pays more tax than someone who inherits a company worth billions” he stated.
The advisor’s remarks point to a broader critique of the influence of wealth and privilege within German politics. Truger’s call isn’t merely about revenue generation but reflects a belief that the political power of wealthy individuals and families needs to be curtailed. He frames the levy not as punitive, but as a necessary step towards a more equitable distribution of the burden of economic challenges and a recalibration of the balance within the German economic landscape. The proposal is likely to ignite a fierce debate, with potential ramifications for the government’s fiscal strategy and the broader social contract within Germany.