"Inheritance Tax Remains Unjust Despite Compromise"

After a lengthy political dispute over a required reform of the German inheritance tax system, the mediation committee of the Federal Government and the Länder has reached a compromise. Professor Christoph Spengel, research associate at the Centre for European Economic Research (ZEW) and Chair of Business Administration and Taxation II at the University of Mannheim, comments on the recent agreement,

"Unfortunately, the compromise reached by the mediation committee does not change the fact that the inheritance tax in its current form is unjust. Ownership of firms may still be passed on practically tax-free from one generation to another, while other types of assets are taxed at up to 50 per cent. This is preposterous. A more reasonable solution would be to set the inheritance tax rate at ten per cent, minus personal tax allowances, in order to keep inheritance tax revenues at a constant level."

For more information please contact

Prof. Dr. Christoph Spengel, Phone +49(0)621/181-1704, E-mail spengel@uni-mannheim.de