OCTOBER 31, 2025 TAXES GROUNDCOVER NEWS Martyna Linartas on inheritance tax: “We need to make the rich pay more” ULRICH JONAS Hinz&Kunzt Hinz&Kunzt is a street newspaper in Hamburg, Germany. Translated by Lisa Luginbuhl, Courtesy of INSP.ngo In her new book, political scientist Martyna Linartas explains why the gap between rich and poor in Germany is widening — and what we can do about it. Hinz&Kunzt: You claim that, contrary to popular belief, Germany is not a meritocracy but a society based on inheritance. What does that mean? Martyna Linartas: That’s not just an opinion; it’s a description of the facts. More than half of all wealth in this country now consists of inheritances and gifts, so how rich or poor I become doesn't depend on what I earn during my life; it depends on whether I inherit anything from my parents or grandparents. You are calling for higher inheritance tax for the rich to make society more equitable. Why hasn’t this been implemented already? There is a lobby of big money working to maintain the status quo. Take the Family Business Foundation, for example: it invests millions in campaigns, communication strategies and political meetings — because billions are at stake. We have had three inheritance tax reforms since the mid1990s. It is regrettable that parts of the legislation correspond exactly to what the foundation wanted. Because of the many exemptions, the tax system is now more full of holes than Swiss cheese. Would reintroducing the wealth tax, which was suspended in 1997 by the then black-yellow [conservative CDU/CSU and liberal FDP coalition] federal government, be an alternative? The wealth tax is not an alternative to inheritance tax; we need both. But it is also important. We need to straighten out the entire tax system according to the principle that strong shoulders should bear more than weak ones. The wealth tax is fundamental because, on the one hand, we have more and more people living in poverty and, on the other hand, more and more who are rich. Every year, the wealth of millionaires and billionaires grows. If we want to tax these people fairly, we need the wealth tax because the income that very rich people earn consists of returns on their assets without them having to work for it. The rich pay more income tax. That is true for 99% of them. But when it comes to the top1%, things get interesting: for three decades, our tax system has heavily favoured income that does not come from work. While a middle-class family pays 43% in taxes and duties on their income, multimillionaires pay an average of 29% and billionaires 26%. Looking at the political debates, one could still get the impression that strengthening inheritance tax and reintroducing wealth tax would hit the middle class harder than the rich. This is a narrative often cited by the economic elite. It makes people afraid: “Oh my God, if inheritance tax is increased, Grandma’s little house will be gone, and my job will be at risk!” That’s nonsense. We had a wealth tax and a higher inheritance tax for decades, and Germany did well. Besides, the rich are not going to leave the country and set up their businesses elsewhere because of a few percentage points of tax. There are many studies on this. In your opinion, is there a model for fairer taxation? Germany. But not today, rather at the beginning of the Weimar Republic. In 1919, we had an inheritance tax of up to 90%. We had a wealth tax, the so-called Reichsnotopfer. And we had higher income taxes. We had all of that after the Second World War, too. You could say that in times of crisis, a so-called window of opportunity arises because people realize that they need to show solidarity with one another as a society. Then they also have more courage to tackle big issues instead of just maintaining the status quo. In the 1970s, we had another phase in which people said, “We must ask the wealthy to pay more, rather than just kindly requesting that they donate more.” Many wealthy people have established charitable foundations. Is that a positive thing? Donations are never as large as the potential revenue from wealth-related taxes. And with donations, the decision-making power over how the money is used remains in the hands of the wealthy. But we cannot believe and expect that they have all the problems in view. We need our democracy, in which the politicians we elect decide what happens to our tax money, 7 Photo by Ashwin Vaswani and invest money in areas that are not trendy. No wealthy entrepreneur would donate money to send a bus to remote villages. Only a state that takes the weaker members of society into account would do such a thing. You are also campaigning for a basic inheritance: all young adults should receive a certain amount of money from the state. Why? In more than 100 years of democracy, the poorer half of the population has not managed to accumulate any significant wealth. Studies also show that taxing the rich in the form of wealth and inheritance tax would not be enough to significantly reduce inequality. The question is: what would be fair? We should also think in a different direction: that not only the top 30% receive inheritances and gifts, but everyone. With basic inheritance, young adults would receive a small fortune at a crucial moment in their lives. There are different ideas about the amount, ranging from €20,000 to €190,000. Which model would you choose? €190,000. Who is going to pay for this? If we make the tax system fair, we can generate additional revenue of over €200 billion. Even with a basic inheritance of €190,000 for everyone, there would still be money left over. What is important to me is that we still need a basic child allowance that is poverty-proof, higher wages and better infrastructure. Because basic inheritance is not a panacea. I see it more as an expression of a new understanding of wealth, namely that it is always built up collectively in a society. A company, for example, needs good employees to be successful. However, business assets usually belong to only a few — even though many have worked to build them up. How do you envisage introducing basic inheritance? We need to introduce children and young people to the topic over many years. I can say from my own experience that when you grow up in poverty, you learn to save, but not to invest sustainably. So we need to talk about it: if you receive such a sum of money, what can you do with it? Do you want to realize a housing project? Start your own business? Or finance a degree abroad? Aren’t you afraid of 18-year-olds buying sports cars with it? There will be some. But I am against general suspicion. If we allow young people to vote, be elected and go to war, they should also be allowed to decide how to spend their money. When you see how we all live beyond our means in Germany, how we far too rarely consider consumption and climate change together; inheritance is also a wonderful opportunity to talk in schools about a more sustainable approach to money — especially since it is often the rich who leave the largest carbon footprint. There are no political majorities in sight for your ideas. Who should bring about change? In a democracy, something like this has to be implemented by politicians. We have two options: either we continue as before and watch the gap between rich and poor widen further and further, or we bring about change. Some countries are cautiously leading the way, such as Spain and Norway, which have introduced or increased a wealth tax. In the United States, billionaires are undermining the pillars of democracy, increasing their wealth and pushing through crude ideas. What gives you hope that things will be different here? We have a different party system. In see TAXES page 14
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