The taxation of wealth and inheritances is aimed at strengthening distributive justice. However, beyond the motive of justice, wealth and inheritances taxes pose economic risks.
Inheritance and wealth tax in the election programs
German Economic Institute (IW)
The taxation of wealth and inheritances is aimed at strengthening distributive justice. However, beyond the motive of justice, wealth and inheritances taxes pose economic risks.
Wealth tax and inheritance tax can be particularly detrimental to efficiency and therefore anti-economic if they burden business assets. In the best case, both types of taxes are paid from current income from the asset, i.e. the company, and can therefore be converted into an effective income tax burden. A possible deferral can spread the payment of the tax over several years but does not change the fundamental burden on business income, even if the tax is paid by natural persons, i.e. the owners or heirs of the business assets. If current income is not sufficient to pay taxes, the substance of the company is affected. But even if current income is sufficient, wealth and inheritance taxes reduce the ability of companies to make investments or create jobs because part of the income is used to pay taxes.
Inheritance and wealth tax in the election programs
German Economic Institute (IW)
A Comparison of Public Revenues Across the Federal States
To ensure equivalent living conditions, the federal government influences the revenues of the states and municipalities. Under the fiscal equalization system, financially weak states receive surpluses in the distribution of sales tax revenues, while financially strong states must accept shortfalls.
IW
Reform of Personal Income Tax
Reforming personal income tax has been on the political agenda for years. Although bracket creep has largely been offset over the past ten years, the income tax schedule itself has not been structurally reformed.
IW