A few days before the German Federal Constitutional Court begins its proceedings regarding inheritance and gift tax, Stefan Nacke, Chairman of the Union faction’s labor group, and Friedrich von Schönfeld, Managing Director of the German Caritas Association, have called for an increase in inheritance tax. This demand comes in a paper published by the “Süddeutsche Zeitung” (Wednesday edition) titled “Performance Must Count More Than Origin,” which advocates for a shift in the Union’s tax policy.
Nacke and von Schönfeld argue that when someone decides to leave something behind for their children, they are acting responsibly. This act, they contend, reflects a drive to work, save, and take entrepreneurial risks-a life achievement that deserves recognition. However, they assert that the achievements of the person who dies are not the achievements of the heir.
The authors of the paper maintain that a society which demands personal responsibility must also address the opportunities available to those who begin without wealth. They caution that property policies should not serve solely the interests of those who already possess assets; they must also create pathways for those aspiring to acquire ownership. They point out that the Basic Law connects the protection of property and inheritance with a duty owed to the public. However, they believe this relationship has become “unbalanced” in the case of inheritance tax.
While Nacke and von Schönfeld concede that a fairer inheritance tax will not resolve housing shortages or the financing issues facing social security, nor will it absolve the state of poor financial management, they believe it offers a credible response to the question of how the financing and renewal of the common good can be made equitable. They press the point that performance must be valued more highly than inheritance. Those advocating for greater personal responsibility should not accept a reality where advancement is often determined by inheritance rather than merit.
The two authors suggest that the upcoming social reforms intensify this problem. They argue that if employees are debating higher contributions and benefit recipients are facing cuts, the privileges associated with transferring large fortunes should not be left outside that political discussion. They further clarify that while inheritance tax reform must allow for the continuation of businesses, this does not justify comprehensive exemptions from taxes on large inheritances. Protecting “the continuation of the business” is the goal, not the tax-free inheritance for the beneficiaries.
The Union has traditionally rejected increases, often citing the fact that small and medium-sized family businesses should not face risk to their economic foundation in the event of an inheritance. Nacke’s labor group consists of 62 Members of Parliament, making it significantly larger than the Young Union Group, which recently gained attention for criticizing the government’s pension policies.
