Wealth tax

The term wealth tax is in after the 2005 election led reform discussion of the German tax law has become known, often populist used neologism . Another catchphrase for this is the millionaire tax , opponents call it the envy tax . The catchphrase referred to income wealth . Years later, after the first political discussion was no longer relevant, the term wealth tax was occasionally used in Austria and Germany for a wealth tax .

Germany

legislation

Marginal tax rates of the income tax tariffs 2004-2007, "rich tax" since 2007 (blue)

The increase in income tax for high incomes, known as the “rich tax”, was agreed in the coalition agreement of November 11, 2005 between the CDU , CSU and SPD . It was introduced with the “Tax Amendment Act 2007” and has been in force since January 1, 2007. The tax on the rich is not a separate tax, but merely an increase in the income tax rate for higher incomes.

In the 2010 fiscal year, their revenue amounted to approx. 640 million euros (2009: 1.03 billion euros; 2008 790 million euros; 2007: 650 million euros). The solidarity surcharge is already included in this revenue. According to the Scientific Service of the Bundestag, only around 57,942 people were affected by the “rich tax” in 2009, i.e. 0.22% of taxpayers. This number rose to around 156,000 taxpayers by 2017 and to around 163,000 by 2018.

Design

To the extent that the taxable income in the 2019 assessment year amounts to € 265,327 for individual assessment ( Section 32a (1) No. 5 EStG ) and € 530,654 for joint assessment ( Section 26 , Section 26b in conjunction with Section 32a (5) EStG ), the tax rate is 45% ( marginal tax rate ). This level turns the otherwise continuous German income tax rate into a tiered rate .

In contrast to the top tax rate , the tax rate corresponding to the wealthy tax is also formally referred to as the "maximum tax rate".

However, this tax rate did not apply to profit income in the 2007 assessment period . This regulation was justified by the fact that a corporate tax reform came into force on January 1, 2008 .

Political discussion

The main criticism was that - according to Gustav Horn , head of the union- related Institute for Macroeconomics and Business Cycle Research - it was merely a matter of “symbolic politics”, which ultimately had little impact and “does not help anyone”. Accordingly, the economist Rudolf Hickel stated that the tax on the wealthy had a pure placebo effect, "a general but temporary increase in the top tax rate to 45 percent would have been more effective."

The chairman of the CSU regional group in the Bundestag , Peter Ramsauer , described the “rich tax” as “economically nonsensical envy tax”. The President of the Association of Taxpayers , Karl Heinz Däke , argued similarly, seeing considerable constitutional concerns.

The former Vice Chancellor Franz Müntefering , on the other hand, advocated the "rich tax", it was reasonable to represent that those "who are at the top have to pay a bit more in taxes." The deputy chairman of the CDU workers' wing , Gerald Weiss , said that Load justice is needed: "Everyone should have to carry what he can carry."

Prominent signatories headed an open letter - initiated by the shipowner Peter Krämer - with the headline "The tax on the rich is ridiculous" and called for consistent taxation of the rich.

In addition to the political discussion about the purpose of the tax on the rich, it was also examined from an economic point of view to what extent the political goal of a differentiated treatment of profit and surplus income could be achieved at all. The investigation came to the result that the changes in the law were “not a coherent model” that caused “unwanted effects”.

In 2006, in the period between the agreement of the coalition agreement and the entry into force of the Tax Amendment Act, 71% of those questioned supported the introduction of the tax on the rich, according to a survey by the Wahlen research group.

Austria

Income tax rate 2016 compared to 2009 in Austria

In Austria , too, there was a public debate about a comparable regulation. The SPÖ , Greens and FPÖ showed sympathy for a tax on the rich, Finance Minister Karl-Heinz Grasser rejected the proposals in November 2005 as “meaningless for Austria”. However, with the 2015/2016 tax reform, a top tax rate of 55% was introduced for incomes over 1,000,000 euros.

Since the financial crisis in 2007 , there have been new proposals for wealth taxation for the rich for the purpose of budget consolidation. In 2011, the Austrian Chancellor Werner Faymann proposed a millionaire tax, which should amount to 0.3% to 0.7% for assets of EUR 1 million or more. Depending on the percentage, it should bring 500 million to 2 billion euros in government revenue.

In Austria there was a wealth tax until the 1990s , and in the interwar period there was a very controversial housing tax in Vienna .

France

In France in 2012 won François Hollande , the election against Nicolas Sarkozy and became French president . In September 2012, he announced high savings and a tax on the rich that was passed in October 2012. Income of over 150,000 euros should then be taxed at 45%. The tax rate for incomes of more than EUR 1 million should be 75%. The 75% tax rate was declared unconstitutional by the Constitutional Council in the planned form at the end of December 2012 . The council did not criticize the amount of the tax per se, but the unequal treatment of households. If two partners earned less than one million euros each, they would be exempt from the tax. If one partner could get the same income alone, he would have to pay.

Media reported that some wealthy people had moved to neighboring countries or were planning to do so, also because of anti-business sentiment in France. The actor Gérard Depardieu in particular caused a sensation, who emigrated to Russia with media coverage and accepted Russian citizenship there.

According to records of the ECB , up to 70 billion euros in capital have flowed out of France since autumn 2012, which is mainly attributed to the introduction of the wealthy tax. As of January 1, 2015, the wealthy tax is no longer applied.

IMF

In 2013, the IMF's Taxing Times report published the view that "there appears to be room in many developed economies to extract more income from the top of the income pyramid". After some violent reactions in politics and the media, the IMF made it clear that the concept of a one-off ten percent property tax on savings, securities and real estate presented in this report was not an official proposal by the IMF, but a “purely theoretical thought game”. The ECB Council member Ewald Nowotny warned against uncertainty among savers through such ideas.

Empirical Findings

Empirical studies show that tax increases lead to adjustment reactions on the part of taxpayers. Taxpayers with higher incomes hardly react to taxation with their basic real economic performance behavior, for example with regard to working hours and scope or educational and career decisions. Instead, they respond with tax avoidance . Calculations with "optimal tax models" show that the top tax rates could be significantly higher if tax avoidance were more restricted.

Web links

Wiktionary: Rich tax - explanations of meanings, word origins, synonyms, translations

Individual evidence

↑ Millionaire tax is "pure election campaign" . In: Süddeutsche Zeitung , June 22, 2005.

↑ Rüttgers warns Merkel . In: Die Welt , November 9, 2005.

↑ ^a ^b Chancellor wants “rich tax” from one million euros. In: derStandard.at. August 28, 2011, accessed December 7, 2017 .

↑ Economist Heiner Flassbeck - "The tax system has to be completely readjusted". In: Deutschlandfunk Kultur. Deutschlandradio, accessed on March 19, 2020 (German).

^ Coalition agreement between CDU, CSU and SPD of November 11, 2005, p. 68 on bundesregierung.de

↑ Tax Amendment Act 2007. In: Bundesgesetzblatt , Volume 2006, Part I, No. 35, of July 24, 2006

↑ Answer to a small inquiry (PDF; 161 kB) printed matter 17/691, February 10, 2010

↑ bundestag.de (PDF)

↑ Federal Government: Answer of the Federal Government to Small Inquiry - Printed matter 19/8837 . Ed .: German Bundestag. Berlin March 29, 2019 ( bundestag.de [PDF]).

↑ Taxpayers with the highest tax rate. In: Poverty and Wealth Report. Federal Ministry of Labor and Social Affairs, accessed on June 2, 2020 .

↑ Merz moans about Merkel . ( Memento of the original from September 26, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. ZDF , November 13, 2005. @1@ 2Template: Webachiv / IABot / www.zdf.de

↑ Wolfgang Otto: Comment Reichensteuer: Symbol politics that help no one In: Tagesschau from May 2, 2006.

↑ Warn economy . n-tv , November 13, 2005.

^ Constitutional conformity of the tax on the rich is generally doubted . In: FAZ.net , May 3, 2006.

↑ Constitutional lawsuit against wealthy tax? ( Memento of the original from October 20, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. heute.de , May 7, 2006. @1@ 2

↑ Tax on the wealthy brings less money than hoped . In: Süddeutsche Zeitung , May 7, 2006.

Jump up to the rich . In: FAZ.net , November 7, 2005.

↑ The tax on the rich is ridiculous , full text.

↑ Tax on the rich hits the wrong people . ( Memento of the original from September 29, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. In: Financial Times Deutschland , September 21, 2006. @1@ 2Template: Webachiv / IABot / ftd.de

^ Armin Schäfer: The reform of the welfare state and the German party system: Farewell to the people's parties? In: Journal for Parliamentary Issues . tape 38 , no. 3 , 2007, ISSN 0340-1758 , p. 648-666 .