A renewed discussion surrounding inheritance tax reform is underway within the Christian Democratic Union (CDU). Following a recent address in the Bundestag where Chancellor Friedrich Merz refrained from categorically ruling out tax increases, the CDU’s Economic Council is now urging a cessation of the debate. Wolfgang Steiger, General Secretary of the council, cautioned against further tightening of inheritance tax regulations, stating they could negatively impact family-owned businesses already burdened by high tax and contribution rates.
The suggestion of a “flat tax” model, previously considered by the CDU, has also been dismissed by Steiger, who expressed concern that such a proposal would trigger competitive posturing amongst parties during election campaigns, similar to the debates surrounding minimum wage legislation.
However, a significant segment of the CDU’s social wing, alongside CDU/CSU parliamentary group leader Jens Spahn, are advocating for reform. Dennis Radtke, Chairman of the Christian Democratic Workgroup, argues that discussions regarding fairness should not be limited to the debate surrounding basic income support. He highlighted perceived inconsistencies in the current system, referencing the taxation of inheritances for properties in affluent areas while allowing individuals with substantial assets to avoid taxation through other mechanisms.
The Federal Constitutional Court is expected to deliver a ruling later this year regarding the constitutionality of the generous exemptions currently afforded to business heirs. Experts within the CDU and CSU anticipate that the court will mandate a reform of the inheritance tax system.
