In this year’s Bundestag election campaign, several parties are promoting their plans for the wealth tax. However, whether a renaissance of the wealth tax can actually succeed depends on the details with which one seeks to achieve a constitutional reassessment of the wealth tax in Germany. Because the collection of the property tax failed since 1997 for good reason. But the plans of the Greens, the SPD and the Left Party differ in several essential points. Thus, the SPD intends to reactivate the property tax law, which is still valid but remains without application, with certain adjustments in order to restore constitutional conformity. The Greens, on the other hand, are planning to draft a completely new wealth tax law. The left, on the other hand, with a progressive tax rate of up to 5% and an allowance of EUR 1,000,000 on a significantly higher taxation of private assets of the particularly rich section of the population. In addition, they demand a progressively staggered levy on net assets of more than EUR 2,000,000 with installment over a period of 20 years.

In the 2021 Bundestag election campaign, the parties currently represented in the Bundestag with their electoral programmes also propagate very different, even opposing positions in tax terms. Hardly any other tax issue makes this clear, especially on questions of the future status of property tax. Property tax is one of the oldest types of tax in Germany. However, in the still valid version, the property tax law justifying it is unconstitutional according to a judgment of the Federal Constitutional Court of 1995. However, since the legislature did not make any adjustments to the Wealth Tax Act so far, the collection of the Wealth Tax expired at the turn of the year 1996/1997. But some parties have had new plans for wealth tax for quite some time. Therefore, their plans for a reintroduction of the wealth tax are of course also part of their election programs for the 2021 federal election. And we are now investigating with which plans the parties come up with regard to the wealth tax for the next legislature.

One thing beforehand: This article serves to present the political views of the parties currently represented in the Bundestag on property tax expressed in the run-up to the 2021 federal election. So here we only gather facts and analyze individual aspects. This is not a political opinion, because a political quintessence on this is beyond our ambitions. We are happy to leave this to our responsible readers.

53 parties and the Südschleswigsche Wählerverband (SSW) are admitted to the 2021 Bundestag election. While it may seem unlikely that all of these parties will incorporate their own wealth tax plans into their electoral programs – and we are honest, we failed to review all of these electoral programs in terms of wealth tax. But it seems to be only relevant for the parties currently represented in the Bundestag to take a closer look at what their plans for the wealth tax are. That is why we focus our critical attention exclusively on these parties, which in our opinion have the prospect of sending representatives to the future Bundestag again this year.

However, what impact one or the other government coalition potentially resulting from the federal election may have on the future status of the property tax remains unnoticed in our considerations. But it is probably certain that this aspect may lead to some complicated coalition negotiations in negotiations between parties who have conflicting ideas about this. From a tax point of view, one can also be curious about the outcome of these events, which in all probability only gives information about the actual implementation of the plans of the governing parties on the wealth tax after weeks or even months after the actual election.

What is remarkable about the electoral program of the Union is that the CSU this time waives its own Bavarian electoral program. Instead, the CDU and the CSU share their political projects and positions in a joint election programme.

Not surprising is the attitude of the Union parties to the wealth tax. Because they reject the reintroduction of the wealth tax, among other things, on the argument that it endangers jobs. In addition, the reintroduction of property tax would affect homeowners and thus also tenants.

Since this is cited as the main reason for the rejection of the property tax, one can elegantly escape the discussion about the original meaning of the property tax, as it was already intended by the founding fathers who drafted our constitution for a social constitutional state. But this also avoids an investigation into why it could even come to the point that the wealth tax gradually lost importance. Was it perhaps due to the fact that for a long time the actually high effort that a main determination procedure for the determination of current and thus realistic unit values would have caused? Reunification certainly provided a good opportunity to redefine the unit values that form the basis for collecting wealth tax.

In fact, there is also an obligation to determine the tax base as realistically as possible. This view is held at least by the judges at the Federal Constitutional Court in their judgment on the unconstitutionality of the property tax of 1995. But the Basic Law also lacks a concrete timetable for routinely recurring main determination procedures. Although § 21 (1) of the BewG stipulates that the main determination of unit values must take place every six years, this actually took place only twice. Thus, unit values that were established in the old federal states on 01.01.1964 still apply, while in the new federal states even unit values of 1935 are still decisive. The fact that the collection of property tax in the new federal states was waived for a time in the course of reunification can hardly be used as a valid argument for this omission.

Therefore, the question that is in the room is quite relevant: Did the Union parties specifically work to erode the legal basis under the feet of the wealth tax? If the answer is positive, then the Union can at least be held responsible for overturning the constitutional protection of property tax.

Now you might think that the Union parties could have a vested interest in continuously reducing the importance of the wealth tax and delaying the decision for a new main determination procedure for decades. After all, the wealthy section of the population, which bore the wealth tax in the past, belongs to the core electorate of the CDU and CSU. But it's hardly that simple. In fact, SPD-led governments have also dealt with this issue stepmotherly since 1964. Even after the Federal Constitutional Court declared the property tax unconstitutional, the SPD was quite able to correct this circumstance.

Therefore, it may be quite surprising in 2021 when the SPD announces plans for a future collection of wealth tax in its election program. It is all the more surprising that the future basis for property tax should be the property tax law, which is still valid, albeit in a constitutionally adapted variant. However, without addressing the actual tax problem with regard to the hopelessly outdated unit values, the SPD cannot offer a concrete solution for the implementation of its plans for the wealth tax. In fact, from this perspective, the electoral issue of wealth tax seems more like lip service, which can be stripped off like an uncomfortable garment in any future coalition negotiations in order to secure participation in the government.

In any case, it is fitting that the SPD also makes partly vague, partly contradictory information with regard to the concrete design of the wealth tax. Thus, according to the SPD, the wealthiest section of the population – the top one to two percent – is the goal for the future collection of the wealth tax. At the same time, however, no jobs should be endangered by the wealth tax and no double taxation should occur. But for assets abroad, only a double taxation agreement should protect against this. Business assets should be privileged, but corporations should also be taxable. In addition, an allowance of EUR 2.000.000 is provided for individual investments and twice as much for joint investments. The tax rate should then begin progressively at 1% and then rise from EUR 20,000,000 to 1.5% for taxable assets and to 1.75% for EUR 100,000,000. The highest tax rate with 2% should finally apply from a taxable assets of EUR 1,000,000,000. Further details are contained in the SPD cornerstone paper.

The Greens had also already had an opportunity within the framework of a government coalition to work towards restoring the wealth tax. But as a junior partner of the SPD-led coalition government under Gerhard Schröder, this opportunity was missed.

Nevertheless, this party is currently propagating its plans for the wealth tax in a new guise. Yes, unlike the SPD, the Greens advocate a different approach. You propose that the wealth tax law be drafted from scratch. The property tax should only be incurred from a property of EUR 2.000.000 per person, whereby a tax rate of 1% is provided. Furthermore, operating capacity is to be favored.

But the favoring of business assets is only one aspect with which the Greens approach the economy. In return, they also want to provide financial incentives for investments in environmentally friendly technologies, which should play a role in the context of wealth tax. The hope is that new jobs will be created in medium-sized or family businesses.

But how realistic is this project? The latter point, in particular, should give food for thought. Because for a medium-sized company, a relevant asset of over EUR 2.000.000 and a tax rate of 1%, you can quickly calculate how much – rather how little – you can save as a taxpayer. And when it comes to a family business, even less so. Assuming the taxable assets of such a family amount to EUR 6,000,000, which corresponds to a net assets of EUR 10,000,000, the property tax on them amounts to just EUR 60,000. What future-oriented investment in a family business can you buy for this amount? Maybe an electric car? In any case, this is not a big leap. But this idea in itself is quite commendable. Above all, in the whole discussion on the reintroduction of the wealth tax, it is a refreshingly new approach that the other party programs examined here lack.

Apart from that, however, the Greens also fail to answer the question of how they intend to bring the property tax into line with the Basic Law. However, since they take a completely new legal approach, which one would like to develop later, we cannot make a tax assessment at this point.

If the SPD and the Greens are already flirting with a reintroduction of the wealth tax, then the left is certainly not inferior to this request. In fact, they demand the most significant taxation of assets of all parties presented here. The plans of the left for the property tax provide for a taxation already from a property of EUR 1,000,000. Whether this is enough, however, to save a self-used property in the city center from taxation, one may well doubt. After all, an allowance of EUR 5,000,000 on operating assets should apply. In addition, the tax rates should be progressively differentiated and at 1% if the taxable assets are less than EUR 50,000,000. In addition, the Left considers 5% to be appropriate.

But the plans of the left for the wealth tax go even further, or beyond. Thus, a separate, also progressively graduated property levy should take place. This involves a graduation ranging from 10 % to 30 % and should be subject to the same exemptions as property tax. For this purpose, an installment payment should be possible spread over up to 20 years.

Just like the SPD and the Greens, one may argue that the increase in wealth in Germany in the past was positive, especially among the already high-net-worth section of the population, and this was accompanied by an increasing impoverishment of the other sections of the population. However, one may also doubt whether this fiscal measure will actually serve or even serve the lofty goal of a welfare state compensation. At least the argument that this violates the principle of half-division need hardly be feared by those who advocate the reintroduction of the wealth tax. After all, both the Federal Finance Court and the Federal Constitutional Court now agree that this previously expressed principle is by no means based on the Basic Law. But, in the words of Frederick the Great, a shepherd should only shear his sheep instead of pulling off their fur.

The plans of the FDP naturally look completely different again. Because this party also draws a significant share of its votes from the environment of the wealthy. Therefore, their attitude to the wealth tax is as short as clear: With the FDP, there will be no new edition of the wealth tax, let alone a wealth levy in the sense of the left.

It seems strange here, however, that one seeks to protect the middle class, which already bears a high tax burden, but if the wealth tax is revived according to the plans of the SPD, the Greens and the left in comparison to the population class with the most assets in Germany would have a rather small fortune to tax. In addition, possible easements for the middle class do not seem to get a place in the discussion by the FDP. Does the FDP withhold its true agenda?

The alternative for Germany, on the other hand, is a party that hardly conceals its actual political goals. But what are the plans of the AfD with regard to the wealth tax? After all, the AfD has so far hardly had the opportunity to prove its tax expertise. In economic terms, too, we know little more than that it calls for the reintroduction of the Deutsche Mark. At least as far as their knowledge of the correct spelling of the word wealth tax is concerned, we can make a statement. And we attest to this party, at least on this point, little expertise. Because in their election program they used the spelling “asset tax”, which is an “s” too many. So, dear AfD, next time check the correct German spelling! Incidentally, this is the only one of the parties critical of this lapse.

After this incidental comment, we now want to deal with the actual tax issue again. Well, as a conservative party, the AfD also seems to categorically reject the wealth tax. However, it is also remarkable here that it wants to protect medium-sized companies in particular against wealth tax. On this point, the FDP and AfD agree. Of those sections of the population who have a large part of the assets available in Germany and who would be significantly more affected by the taxation of their assets, not a word can be heard here either. Well, perhaps the sincerity of the AfD’s election program is, at least in this respect, rather less salary than previously assumed?