Suspended wealth tax has cost Germany over 380 billion euros so far

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Myth debunked: Fear of tax evasion is unfounded

Berlin, July 2, 2024: Germany’s decision to abandon the wealth tax, which has been suspended since 1996, has so far cost the country over 380 billion euros – equivalent to 80 percent of the 2024 federal budget. The supposedly unavoidable tax flight of the wealthy and super-rich is one of the central arguments against the reintroduction of the wealth tax. The study „No fear of tax evasion!“ published jointly by Netzwerk Steuergerechtigkeit and Oxfam Germany disproves this myth and shows that In recent decades, Germany has established comprehensive and internationally exemplary rules that make tax evasion massively more difficult, if not impossible. A wealth tax to reduce the concentration of wealth that threatens democracy is therefore not only possible, but also urgently needed.

The study shows:

Until 1996, a wealth tax of one percent was payable on assets in Germany. Because it has been suspended since then, more than 380 billion euros are missing from the common purse. That is almost 80 percent of the 2024 federal budget. Since 2001, the assets of the hundred richest Germans have grown by around 460 billion euros.
Among the current 226 German billionaires, there are only 29 people who wanted to avoid their tax liability by moving away. Since 1972, both the laws against tax evasion and the measures against illegal tax evasion have been tightened. With a combination of exit tax and the taxation of company relocations abroad, a comprehensive toolbox against tax evasion is now available. Tax evasion is expensive. An example calculation shows this: if BMW heiress Susanne Klatten wanted to move abroad with her BMW shares and the assets she has accumulated from BMW dividends, she would have to pay almost 6.5 billion euros in taxes, which corresponds to around 30 percent of her estimated assets.

Manuel Schmitt, Social Inequality Officer at Oxfam Germany: „The study clearly shows that the fight against tax evasion is above all a question of political will. Instead of starting to slash development cooperation and social spending in the federal budget, the German government should finally put the taxation of very high wealth on the agenda. This could reduce the concentration of wealth, which is a threat to democracy, and generate urgently needed financial resources for social cohesion and climate protection – in Germany and worldwide.“

Christoph Trautvetter, Netzwerk Steuergerechtigkeit: „The fear of tax evasion is just as widespread among the population as it is in politics. But this fear is irrational. Tax evasion is neither a fate nor a mass phenomenon. Very few people are aware of the very effective and far-reaching countermeasures already in place. And contrary to what individual scandals suggest, most large German fortunes are not abroad and they are linked to Germany through their social and political capital. So it’s time for a rational debate on the taxation of large fortunes.“

The full study „No fear of tax evasion“ can be found here.

Summary details from the study:

Press contact

Nikolai Link | +49 177 73 75 288 | nlink@oxfam.de

As an international non-profit organization, Oxfam works with people around the world to fight poverty, oppression and social inequality. Side by side with almost 2,250 local partner organizations in around 90 countries, we work for a just and sustainable world.

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