The SPD aims to reform inheritance tax to burden large fortunes more heavily while relieving smaller ones. The concept proposes a lifetime exemption of one million euros and raises the allowance for family businesses to five million euros. Business associations and the CDU criticize the plans as a burden on the middle class.
The SPD parliamentary group plans to reform inheritance tax, to be presented to the public on Tuesday. According to an ARD report and SPD concept paper, a lifetime exemption of one million euros is proposed: 900,000 euros for close family members and 100,000 euros for distant relatives or non-relatives. Self-occupied homes remain tax-free, while very large inheritances are to be taxed more heavily. Current exemptions of 400,000 euros for children apply every ten years; this ten-year rule is to be abolished.
For the inheritance of businesses, an additional exemption of five million euros is foreseen, allowing most family businesses to pass on tax-free. Taxes above a company value of more than five million euros can be deferred for up to 20 years. SPD deputy group leader Wiebke Esdar emphasized: "We want to ensure that we secure jobs in Germany and propose extensive deferral options to stretch due taxes over 20 years." Finance Minister Lars Klingbeil called the current tax unfair and contrary to the performance principle: "For me, it is very important [...] that issues of inequality and injustice are addressed." He expects reforms by 2026 at the latest, following a Federal Constitutional Court ruling.
The plans face sharp criticism. The Association of the Chemical Industry (VCI) deems them a "wrong signal at the wrong time," which would reduce investments and jeopardize jobs, said executive Berthold Welling. The Family Businesses Foundation warns of "drastic tax increases" that would weaken the middle class and prolong the recession, according to board member Rainer Kirchdörfer: "The SPD model will ultimately harm us all, and we will all find ourselves at a lower level of prosperity." CDU politician Mathias Middelberg criticized: "The SPD concept would massively burden the family-run middle class. After four years of economic stagnation, tax cuts, not increases, are urgently needed." Ifo President Clemens Fuest warned that raising taxes for business heirs would accelerate the decline in investments.
The reform aims for greater fairness but poses risks to family businesses amid economic challenges.
