Wealth tax (Germany)

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The wealth tax was in German tax law, a substance tax on the net assets of a taxpayer. Your tax base is the total assets of the taxpayer minus the debts.

Taxes such as property tax or motor vehicle tax , which do not affect total assets but only individual parts of the assets, are referred to as asset-related taxes.

history

In Germany, a modern wealth tax was introduced for the first time in 1893 with the Prussian Supplementary Tax Act. The German Reich rose to the defense contribution (1913) and the war tax (1918) one-time capital levies, which in 1919 in the Weimar Republic through the Reichsnotopfer continued. This was replaced in 1923 by a wealth tax based on the Prussian model. In its basic features, it continued under the power of the Allied Control Council through the Weimar Republic, the time of National Socialism and the immediate post-war period . In 1952 the German Bundestag passed the wealth tax law, which is still formally in force today.

Wealth tax has not been levied since 1997. It was never raised in the new federal states after reunification . For the wealth tax in the GDR see wealth tax (DDR) .

Tax rate, exemption limit, revenue

The federal states were entitled to the German wealth tax . My rate was in 1995 (above a free allowance of 120,000 DM per family member § 6 para. 1 and 2 WTL) for natural persons annually 1% of taxable assets according to § 10 no. 1 VStG and bodies annual 0.6% after § 10 No. 2 VStG; Foreign wealth taxes could be offset ( § 11 VStG).

In 1996, the last year of its survey, the federal states received a good 9 billion DM (the equivalent of 4.62 billion euros) through wealth tax.

On the basis of calculations for a possible property levy , Stefan Bach came to the conclusion in 2013 that with a personal allowance of one million euros (for married couples, two million euros) and an allowance for business assets of five million euros, around 300,000 people or 0.6 percent of the population would be subject to tax. A tax rate of 1% would then result in a tax revenue of 14 billion euros.

Based on the proposal of several red-green governed federal states from 2012, the DIW carried out a study on behalf of the Friedrich-Ebert-Stiftung in 2016. This study analyzed eight scenarios of wealth taxation, each with different assessment bases. The amount of the personal allowances was varied, whether an allowance was taken into account for business-necessary assets and the type of tax rate. Depending on the scenario, 150,000 to 435,000 taxable persons were calculated. Depending on the scenario, there was a tax revenue of 11 to 25 billion euros annually. Adjustment reactions could reduce the volume.

Cost of tax

The relative and absolute collection costs for the state depend on the specific structure of the tax. In addition to the collection costs, there may also be costs for the taxpayer himself (the so-called “compliance costs” or “payment costs”, e.g. tax advice costs and other legal advice costs) as well as for the judiciary, so that the economically significant total so-called “execution costs” as The sum of administrative and compliance costs can only be given approximately and the information on their amount can differ considerably.

According to an estimate by the Federal Ministry of Finance , in 1996 financial administration costs accounted for around 3% of income from wealth tax.

In a study commissioned by the Federal Ministry of Finance, the Rheinisch-Westfälisches Institut für Wirtschaftsforschung (Rhenish-Westphalian Institute for Economic Research) estimated the total costs for the state and taxpayers for 1984 to be around 32% of the wealth tax revenue (20% collection costs and 12% compliance costs). A publication by the Institut der deutschen Wirtschaft in 2011 even assumed collection costs of around 33% of wealth tax revenue for the years up to 1996.

In a study from 2004 the German Institute for Economic Research (DIW) put the compliance costs at 17%. In 2012, the DIW came out in a study commissioned by the federal states of Rhineland-Palatinate , Baden-Württemberg , Hamburg and North Rhine-Westphalia in a scenario in which only larger assets from 2 million euros per person would be taxed and therefore only 307,000 natural and legal Persons would be affected at an estimated enforcement cost of 1.8% of the tax revenue. However, this result is controversial because it deviates significantly from the previous investigations and its calculation cannot be reconstructed.

In the 2016 DIW study (see section on tax rate, tax exemption limit, revenue ), the collection costs were estimated at 4.4 to 8.2% of revenue. Adjustment reactions could reduce the volume; the collection costs would rise slightly due to the lower volume.

Basic law and wealth tax

The Article 106 of the Basic Law provides for the levying of a wealth tax expressly and that their volume attributable to countries. In its decision of June 22, 1995 , the Federal Constitutional Court declared the specific form of levying a wealth tax in its then form to be incompatible with the principle of equality. The reason was that real estate assets - unlike what happened - should not be treated better than other assets. At the same time, further use was permitted until December 31, 1996. In an obiter dictum , the majority of the judges of the Federal Constitutional Court also mentioned the so-called principle of half - division , according to which wealth tax may only be added to income taxes (such as income tax ) if this results in the total tax burden being "close to a half division" between taxpayers and Treasury remain. This principle - sharply criticized in a special vote by the judge of the Federal Constitutional Court Ernst-Wolfgang Böckenförde - was abandoned a few years later by the Federal Constitutional Court: A generally binding, absolute upper limit for taxes in the vicinity of 50% cannot be derived from the Basic Law .

Böckenfördes special vote

Böckenförde also wrote in his vote that inequality in society “must not exceed a certain level, otherwise it will turn into bondage”. The compensation of socially justified inequalities is one of the core tasks of the democratic and social constitutional state . Securing unlimited property accumulation is not part of the Basic Law, and if inequality can "multiply unrestrainedly", the constitutional order as a whole is in danger. The decision in favor of the social constitutional state - which on the one hand includes the constitutional protection of individual economic rights, on the other hand also the social commitment of property and, for certain areas, even the authority to socialize - represents the historical compromise for the establishment of the Federal Republic of Germany . Böckenförde referred to it, that this attempt to restrict tax sovereignty was made in a situation in which, due to high unemployment and the great burdens resulting from German reunification, there was a need for compensation that was previously unknown in the history of the Federal Republic of Germany. It is not to be understood that in view of these circumstances, moderate access to existing wealth should be constitutionally taboo.

Suspension of tax collection in 1997

Instead of valuing real estate more highly and thus taxing it more heavily, as required by the judgment, the federal government at the time decided not to levy wealth tax any longer - also because of the top income tax rate of 53% plus solidarity surcharge at the time. The wealth tax law has not yet been repealed.

Reintroduction discussion

The DGB , the SPD , the Greens or the Left Party have already started several initiatives to reintroduce a constitutionally structured wealth tax without leading to any concrete results. It is legally controversial whether the federal states are entitled to their own tax determination law .

The legislature has freedom in designing them. So - with a reasonable overall burden on the taxpayer - a wealth tax is generally permissible if it is generally to be paid from the (typically possible) investment income (target income) and not from the asset substance (target income tax). It is disputed whether the control (z. B. when it is raised in times of social distress in war) may be so high that they are not contested more from the proceeds of the assets, but by the power itself must ( substance control ).

The ver.di union argued that the wealth tax should be a tax on assets without any external reason, provided it is used as a redistribution instrument:

“If the top income tax rate is lowered to 42% in 2004 or 2005, this would allow a further increase in the wealth tax rate, even if the principle of half-division was observed. Even higher wealth tax rates would be permissible if the wealth tax were used as a redistribution instrument, which was expressly not qualified as unconstitutional in the wealth tax ruling. "

- Joachim Wieland : Legal opinion on behalf of ver.di, 2003

The General Manager of the Association of Family Businesses organized a campaign against the demand made by the Greens in the 2013 Bundestag election campaign for the introduction of a wealth tax, the addressees of which were all direct candidates in the constituencies.

The French economist Thomas Piketty argues in his bestseller Das Kapital in the 21st Century , published in 2014, for the introduction of a worldwide progressive wealth tax, which should counteract the trend of growing wealth inequality he identified . Piketty also criticizes the fact that the absence of a wealth tax complicates the discussion about inequality, since without taxation there are no reliable data from the statistical offices on wealth distribution.

In a study from January 2016, the German Institute for Economic Research estimated the possible annual income from a wealth tax at 10 to 20 billion euros. The calculations are based on an updated version of the tax suspended in 1997. The economic researchers expect collection costs of 4 to 8% of the tax revenue.

As a condition for possible government participation after the 2017 federal election , the Left demanded the reintroduction of a wealth tax. Your election program provided for an allowance of one million euros and a tax rate of 5%. This tax would affect approximately 400,000 people and generate an estimated revenue of 80 to 100 billion euros annually. This would make wealth tax the third-highest revenue tax in Germany after sales tax and wage tax.

After an initial discussion in his party at the beginning of 2017, the deputy SPD chairman Thorsten Schäfer-Gümbel spoke out against a wealth tax with regard to the legal consequence that low-income or loss-making companies would have to pay the tax on their assets, "because we, among other things state aid reasons have no solution for companies threatened in their existence ”. In the government program for the 2017 federal election, the party congress decided on June 25, 2017 to set up a commission to examine the reintroduction of the wealth tax.

An article in the English online edition of Der Spiegel in 2018 suggested that no wealth tax would be levied in Germany because of the greater political influence of the rich.

On August 24, 2019, Finance Minister Olaf Scholz (SPD) initiated a new debate on the reintroduction of the wealth tax. According to SPD plans, a wealth tax “based on the Swiss model ” should be introduced, which should include special rules for economic difficulties. The possible tax revenue was given as 10 billion euros annually. The proposal was promptly rejected by CDU / CSU and FDP politicians and DIHK President Eric Schweitzer . The former spoke of a "cheap envy debate", of " class struggle by means of tax policy" and described the proposal as "wrong and nonsensical" in the "high-tax country Germany". The latter warned of a lack of capital in companies. To justify the proposal, the acting SPD leader Thorsten Schäfer-Gümbel explains that a targeted wealth tax of one percent would be well below the tax rates of the USA, France and Great Britain, where the tax rate would be over 4 percent. Affected are people with assets of "definitely more than two" million euros. Despite the current good financial position of the state, there was a lack of investment funds of 150 billion euros in the municipal sector. OECD spokespersons approved the SPD proposal on August 27, 2019. A wealth tax has fewer negative effects on economic growth than a high taxation of labor income and makes sense for reasons of distributive justice . After the SPD decided on the cornerstones of a wealth tax, the general manager of the association of family entrepreneurs, who was described in Manager Magazin as the "chief lobbyist of the rich", worked with the association against wealth tax. In representative surveys, the proportion of the population who agreed to a wealth tax had risen in previous years from 35% in 2007 to 72% of those surveyed in December 2019. Another representative survey from 2019 only among people with more than 100,000 euros in assets showed that 76% of those questioned are in favor of a wealth tax.

Individual evidence

  1. ↑ Joachim Wieland: Legal framework for a reintroduction of the wealth tax . Legal opinion on behalf of ver.di, 2003.
  2. ↑ Property taxes - a contribution to the restructuring of public finances in Europe . Report by Stefan Bach on the euro crisis, national debt and private wealth (PDF; 818 kB), DIW weekly report 28.2012, p. 6
  3. ↑ Tax revenue by type of tax 1994–1997 . Federal Ministry of Finance, July 1, 2004.
  4. ↑ Property taxes - a contribution to the restructuring of public finances in Europe . ( diw.de [PDF]).
  5. ^ Stefan Bach: Income and wealth distribution in Germany | APuZ. Retrieved June 23, 2020 .
  6. ↑ a b Stefan Bach, Martin Beznoska, Andreas Thiemann: Revenue and distribution effects of a recovery of the wealth tax in Germany . No. 108 . DIW Berlin: Political Advice Compact, 2016 ( econstor.eu [accessed on May 20, 2020]).
  7. ^ A b D. IW Berlin: DIW Berlin: High revenue potential when the wealth tax is levied again. Retrieved May 20, 2020 .
  8. ^ Costs of taxation in Germany ( Memento from April 20, 2014 in the Internet Archive ). In the monthly report of the BMF 2003 , pp. 81–92, July 21, 2003.
  9. ↑ Wealth taxation - opportunities, risks and design options (PDF; 264 kB), Margit Schratzenstaller , expertise on behalf of the Economic and Social Policy Department of the Friedrich Ebert Foundation. Section 2.3.2, pp. 20–22.
  10. ↑ BT-Drs. 13/5975
  11. ↑ Execution costs of tax collection and the granting of public transfers , Herrmann Rappen, in RWI-Mitteilungen . - Berlin: Duncker & Humblot, ISSN  0933-0089-40 (1989), 3, pp. 221-240. Quoted in Finanzwissenschaft II: Steuerertechnik und Tariflehre - Lecture at the Ruprecht-Karls-Universität Heidelberg, WS 2007/2008 (PDF; 254 kB), Lars P. Feld, p. 15.
  12. ↑ 2nd Berlin Tax Discussion: The assessment of inheritance tax on the constitutional test bench ( Memento from April 21, 2014 in the Internet Archive ). Conference report by Berthold Welling and Andreas Richter., July 24, 2002.
  13. Jump into the moth box . Institute of the German Economy, 2011.
  14. ↑ Models for wealth taxation of natural persons and corporations: concepts, revenue, economic effects; Final report; Research project on behalf of the Bundestag parliamentary group Bündnis 90 / Die Grünen (PDF; 1.1 MB) S. Bach et al., DIW Berlin: Political advice compact.
  15. ↑ Wealth tax: Considerable revenue potential despite expected evasive reactions (PDF; 147 kB). Stefan Bach, Martin Beznoska, DIW weekly report No. 42.2012.
  16. ↑ Taxation of Wealth - A Financial Analysis . Report of the scientific advisory board at the BMF, pp. 56–57.
  17. ↑ 2 BvL 37/91, BStBl. 1995 II, p. 655, judgment of the Federal Constitutional Court (full text)
  18. ↑ BVerfG In: Neue Juristische Wochenschrift. 2006, p. 1191; see. Oliver Sauer: Farewell to the principle of half-division. In: Forum Law. 2006, p. 131.
  19. ↑ Joachim Wieland : Legal framework for a reintroduction of the wealth tax . Legal opinion on behalf of ver.di, 2003.
  20. ↑ Arguments for the reintroduction of wealth tax, the increase in inheritance tax and the minimum taxation of corporate profits ( memento from June 9, 2007 in the Internet Archive ), expert opinion by the German Institute for Economic Research on behalf of ver.di, IG Metall and the Hans-Böckler-Foundation , 2002.
  21. ↑ A corresponding proposal was accepted at the special party conference in Cottbus in June 2003, cf. Christoph Butterwegge: Crisis and Future of the Social State , VS Verlag, Wiesbaden 2006, p. 208.
  22. ↑ Press release of May 18, 2005 , Die Linkspartei.PDS
  23. ↑ request of the Left Party faction on 19 January 2010 at the Bundestag on reintroduction of wealth tax as a millionaire tax (Bundestag printed paper 17/453) (PDF, 66 kB)
  24. ↑ Legal framework for a reintroduction of the wealth tax .
  25. ↑ The power of money . In: Managermagazin, special issue Reichtum . October 2019, p. 68 f., 73 .
  26. ↑ Thomas Piketty: CAPITAL AND WEALTH TAXATION IN THE 21ST CENTURY. (PDF) In: National Tax Journal, June 2015, 68 (2), 449–458. Accessed April 24, 2017 .
  27. ↑ Stefan Bach, Andreas Thiemann: DIW weekly report 4/2016. (PDF) DIW Berlin - German Institute for Economic Research e. V., accessed April 24, 2017 .
  28. ↑ Left puts up hurdles for red-red-green. In: FAZ . June 10, 2017. Retrieved June 11, 2017 .
  29. ↑ Die Linke: Questions & Answers on the subject of wealth tax / millionaire tax ( memento of November 2, 2013 in the Internet Archive ), accessed on April 23, 2017
  30. ↑ Bundestag election 2017: SPD promises tax cut , FAZ 02/11/17
  31. ↑ Key points from the SPD's electoral program. Mitteldeutscher Rundfunk, June 25, 2017, archived from the original on June 27, 2017 ; Retrieved June 25, 2017 .
  32. ↑ Florian Diekmann, DER SPIEGEL: Inquality and Wealth Distribution in Germany - DER SPIEGEL - International. Retrieved July 16, 2020 .
  33. ↑ a b Olaf Scholz advocates wealth tax. TZeit online, August 24, 2019, accessed on August 27, 2019 (English).
  34. ↑ David Böcking: Tax Concept: That is what the SPD intends to do with large fortunes . In: Spiegel Online . August 26, 2019 ( spiegel.de [accessed September 17, 2019]).
  35. ↑ OECD advocates wealth tax in Germany. August 27, 2019, accessed on August 27, 2019 .
  36. ↑ Lukas Heiny, manager magazin: Wealth tax: How the rich influence politics - manager magazin - companies. Retrieved July 28, 2020 .
  37. ↑ Survey: Population sees social imbalance in Germany. Retrieved April 28, 2020 .
  38. ↑ tagesschau.de: DeutschlandTrend: Majority is for a wealth tax. Retrieved March 3, 2020 .
  39. ↑ Taxation: Survey: Majority supports the introduction of a wealth tax. Retrieved March 3, 2020 .
  40. ↑ Martin Greive: Survey: wealthy people support wealth tax - but don't feel understood. In: Handelsblatt. Retrieved May 16, 2020 .

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