According to calculations from the German Economic Institute (IW), people in Germany who earn very little receive, over the course of their lifetimes, far more in social and public benefits than they have ever paid in taxes and social contributions.
For residents in the lowest quartile of earnings, the average total of benefits received is about “€1.08 million”. These benefits include pensions, health‑care and nursing services, housing subsidies, basic income (Grundsicherung) and even the costs of schooling. In contrast, the taxes (income tax and value‑added tax) and social security contributions paid by this group average only “€300 000”.
Those at the top quartile of income pay, on average, “€2 million” in taxes and social contributions over their lifetimes, but they receive only around “€720 000” in benefits, Bild am Sonntag reports.
IW expert Martin Beznoska told the paper: “Our tax and social system redistributes a great deal. Those with little or no income benefit substantially from social and other public services”. He added that the German welfare state is “essentially fair. It clearly helps the vulnerable, but it also burdens the wealthy heavily, so there is no need to increase redistribution further”.
Beznoska welcomed the latest recommendations of the Social State Commission, stating, “The proposals are heading in the right direction”. He argued that the purpose of the welfare state should be to raise as many people as possible into a position where they can sustain themselves through work. “A strong education system and improved incentives for work through taxes and social benefits are crucial to achieve that” he said.
