Government officials have dismissed proposals to increase inheritance tax, particularly concerning the transfer of business ownership. Thorsten Frei, Head of the Chancellery and a member of the Christian Democratic Union (CDU), stated in an interview with “Welt am Sonntag” that the tax system is already intricate and effectively targets substantial private assets.
Frei cautioned that raising inheritance tax could create significant complications during generational transitions within family-owned businesses. He warned that a stricter approach could frequently force sales, potentially prompting investors to relocate, thereby impacting regional expertise and employment opportunities.
Highlighting the importance of capital for innovation and maintaining competitiveness, Frei emphasized that inheritance tax considerations are intrinsically linked to economic structure. Previous attempts to alter inheritance tax regulations have been overturned by the Federal Constitutional Court, underscoring the inherent complexities. He argued that speculation regarding tax policy generates uncertainty, which is detrimental to businesses requiring predictability.
Frei suggested that reducing wealth disparity is better achieved by fostering wealth creation, pointing to the recently introduced early retirement scheme as an example of such policy. He maintained that stimulating wealth creation offers a more effective and sustainable pathway towards a more equitable distribution of assets.
