The German government is exploring options to address a projected shortfall in the federal budget between 2027 and 2029, with a particular focus on ensuring a perceived sense of fairness within the tax system. Finance Minister Lars Klingbeil has advocated for a comprehensive package of measures, including a potential increase in inheritance tax.
Speaking to the Tagesspiegel newspaper, Klingbeil emphasized the importance of a system where all citizens contribute proportionally. He highlighted concerns that individuals inheriting substantial wealth often pay minimal inheritance tax, which he described as inequitable. According to data, Germany sees between €300 and €400 billion in inherited assets annually.
The Minister also pointed to a disconnect between effort and outcome, particularly in high-cost urban areas like Berlin. He argued that even high-achieving individuals are increasingly unable to afford homeownership, whereas those who have received inheritances often face no such barrier. This, he suggested, undermines the principle of meritocracy, a value he intends to address through policy adjustments.
Beyond inheritance tax, Klingbeil indicated a broader need for reform within the social welfare system. He expressed concerns about instances of individuals receiving social benefits while engaging in undeclared work, which he characterized as fraud against the broader public. The coalition government, he affirmed, is aligned on the need to increase accountability for recipients of social welfare who are perceived to be non-compliant. Individuals receiving benefits and refusing to participate in work or engaging in illicit employment should face consequences. Klingbeil concluded by asserting the importance of the Social Democratic Party’s historical role in advocating for change and reform within the country.
