Germany’s Green Party Discusses Prospects of Introducing Wealth Tax

Germany’s Green Party called for the introduction of wealth tax at the Green Party conference in Münster on November 11. A wealth tax, which would require the “super rich” to contribute more to public revenue, meets one of the Green Party’s objectives in closing the wealth gap. The proposal was drafted with caution after the Green Party’s defeat in the federal elections in 2013 after demanding tax increases for high earners.

Opponents of the wealth tax argued that this newly imposed financial responsibility will weaken the middle class. Winfried Kretschmann, State Premier of Baden-Württemberg, argued that he would not let a higher tax liability burden successful family businesses in his state. Kretschman added that, with the global economies becoming increasingly isolationist, Germany’s small- and medium-sized businesses need to increase their savings to protect from potential crises. Kretschmann does not want the state to deplete these companies’ savings through a wealth tax.

Rejecting the wealth tax proposal with a different argument, Elkin Deligoz, a member of the Green Party, confirmed that there were €330 billion available for next years’ governmental budget and setting the right priorities for appropriate usage is more important. In fact, a campaign against tax evasion could prove to be more effective at increasing governmental revenue than a wealth tax.

The few proponents of the wealth tax claim that Germany has experienced an increase in income for corporate managers but a decrease in capital and inheritance taxes. Chair of the Green Party Simone Peter claims that the wealthy should pay a wealth tax to ensure a constant stream of federal funds.

According the Deutsche Welle, the final proposal the party agreed upon lacks concrete detail as to the introduction of wealth tax. There is no definition of the “super-rich” class that the wealth tax would be applied to and no specific tax rates or thresholds from which point a tax would be imposed. The only conditions set so far in the proposal are the preservation of jobs and business assets.