The Family Business Association has warned the federal government, specifically the coalition between the Union and the Social Democrats, immediately before the coalition committee meeting against raising the top tax rate and increasing inheritance tax. Marie-Christine Ostermann, the head of the association, told the “Rheinische Post” that increasing the top tax rate would severely impact many family businesses right in the middle of an economic crisis.
Ostermann argues that instead of finally easing the burdens on companies, the Finance Minister intends to rob businesses of their ability to invest by implementing a higher top tax rate. She stated that partnerships across all industries would no longer be able to invest in jobs and machinery in Germany, let alone remain competitive internationally. “It is as if the Finance Minister were stealing the seed potatoes,” Ostermann commented. She stressed that lower taxes are now vital for the survival of all businesses.
Furthermore, Ostermann sarcastically mentioned that the Finance Minister would no longer need to worry about tightening inheritance taxes on business assets if he first destroyed the substance of the partnerships themselves. Previously, proposals from Finance Minister Lars Klingbeil (SPD) regarding a tax reform had been made public. These proposals involved increasing the standard top tax rate for taxable annual income of around 76,000 euros from 42 percent to 44 percent. Additionally, the wealth tax rate would be raised from 45 percent to 49 percent for incomes starting at 200,000 euros.
