Reduced inheritance shares of hot dogs for numerous descendants
The Social Democratic Party (SPD) in Germany is focusing on adjusting the top tax rate and addressing the issue of fairer inheritance tax as part of the income tax reform. This initiative comes amidst concerns about the unequal distribution of wealth and the tax burden in the country.
Jens Spahn, the Union faction leader, has described the problem of unequal wealth distribution, while Matthias Miersch, SPD parliamentary group leader, has emphasised the need for the coalition to discuss special rules for the wealthiest in inheritance tax.
According to data, every year, around 400 billion euros are inherited or given away in Germany, with only 12 billion, or three percent, being taken by the state in the form of taxes. This unequal distribution of inheritances sees a tenth of the population inheriting half of the total volume, while the poorer half of the population inherits almost nothing.
To tackle this issue, Parsa Marvi, an SPD member and financial expert, believes the social state reform and wealth distribution should be addressed together. Marvi is a member of the Commission for the Reform of the Social State, convened by Minister of Labour and Social Affairs Barbara Bas (SPD).
The commission is developing changes for tax-financed benefits such as citizen's income, housing allowance, or child supplement, to be presented at the beginning of the year. Last legislative period, Klüssendorf, Marvi, and Armand Zorn presented a concept on how tax loopholes could be closed.
One of the proposals made by Tim Kluessendorf, SPD general secretary, is to hold millionaires more accountable by abolishing the exemption need assessment for assets over 26 million euros. Dennis Radtke, the chairman of the Christian labor wing, is also discussing the idea of a fairer inheritance tax within the CDU, stating that exceptions that can no longer be explained should be abolished.
A ruling on inheritance tax by the Federal Constitutional Court could fall as early as this year. The SPD wants to link the debate on social state reforms with a discussion on fairer taxation of high inheritances. Closing the existing loopholes, according to Miersch, would protect small and medium-sized inheritances and create more justice.
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