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Carsten Schneider: »Inequality is growing from generation to generation«
Photo: Martin Schutt / picture alliance / dpa
An unusual idea from economists is now entering the political debate: In order to reduce social inequality in Germany, the Federal Government Commissioner for Eastern Europe, Carsten Schneider, proposes a so-called »basic heritage«.
"Building property is no longer possible for a large part of the population, especially in the metropolises," the SPD politician told the newspapers of the Funke media group.
»A basic inheritance would be an interesting instrument to stop this development and to make the starting opportunities in professional life a little fairer.«
The German Institute for Economic Research (DIW) had calculated that a basic state inheritance of up to 20,000 euros for all 18-year-olds and their financing through an inheritance or wealth tax would significantly reduce wealth inequality in Germany.
The so-called Gini coefficient – the standard measure of inequality – would fall by five to seven percent, depending on how it is structured.
"I think that's a very exciting idea," said Schneider.
»Inequality increases from generation to generation, which is less due to active income than to wealth growth.
If you don't have anything, it's difficult to put aside something and build up a fortune.«
Demand for higher inheritance tax
In terms of financing, Schneider spoke out in favor of “a higher inheritance tax for the top ten percent”.
In Germany, inheritances worth millions are taxed too little, he criticized.
»We run the risk that a rentier society that lives off inheritances will detach itself from normal working society.«
According to the DIW researchers, the lower half of the population has no significant assets.
The richest ten percent of Germans, on the other hand, own more than two-thirds of all private wealth.
The richest one percent of citizens owns 35 percent of the wealth, the richest 0.1 percent still up to 20 percent.
The idea of the basic inheritance is not new, but has been discussed among economists for a long time.
However, it is better known under the name of social heritage.
In 1999, US researchers Bruce Ackerman and Anne Alstott published their concept for such a social legacy, at the time they even proposed $80,000 for every US citizen.
At the end of 2016, Andrea Nahles, then Federal Minister of Labor and later SPD leader, included the concept of a social legacy in the “Work 4.0 White Paper” and in the following year presented her own proposal for a working account for all citizens, also with 20,000 euros.
As an »opportunity account«, it was finally found in the SPD election program for the 2017 federal election.
mmq/AFP