Economists are calling for a basic inheritance instead of a basic income

Wealth is never evenly distributed within an economy. On the contrary, over time they tend to focus on those who are already rich. However, it does not have to stay that way. Because through redistribution, the situation can also be changed again. Historically, wars, economic crises or revolutions, for example, swirled up the financial situation. In the Federal Republic, however, the procedure is less radical: Here, the state is supposed to intervene through taxes and social spending to regulate the situation. But that is a difficult matter. In fact, 35 percent of wealth in Germany is now concentrated in just one percent of the population. For some time now, there have been discussions about new ways to support people with lower and middle incomes in particular. There is discussion about an unconditional basic income. Initial experiments in this direction have been carried out in Finland, Canada and Alaska, for example. So far, however, no state has been able to bring about a nationwide introduction.

Bild: Avij (talk · contribs) / Public domain

Larger inheritances should be taxed more heavily

The economists at the Berlin economic research institute DIW have therefore put a somewhat less radical proposal up for discussion. Accordingly, everyone should receive 20,000 euros from the state on their 18th birthday. This would not be linked to a purpose limitation. So every recipient is free to invest the money, hit it on the head or put it aside for bad times. The whole thing should be financed through higher taxes on large fortunes. The focus here is particularly on inheritance tax. If you like, large inheritances should be burdened more heavily in order to finance a small inheritance for everyone. Ideally, this could at least somewhat curb the unequal distribution of wealth. The experts involved in the proposal assume that the Gini coefficient, which describes income inequality within a society, could be reduced by five to seven percent as a result of the measure. This would bring Germany closer to other EU and OECD countries, at least on paper.

The current coalition partners have ruled out tax increases

However, it is also part of the truth that simply looking at assets does not reflect the whole picture. Because in Germany employees pay comparatively high social security contributions. This leaves them with less money to accumulate wealth at the end of the month. At the same time, however, they also acquire pension entitlements, for example, which are not counted as private assets, but can certainly be valuable in old age. Regardless, the basic inheritance could represent an interesting compromise between the current system and radical reform proposals such as the unconditional basic income. However, it is unclear whether the political realities currently allow implementation. Because actually the parties to the new federal government excluded tax increases in their coalition agreement. The proposal by the Berlin economists should be financed in exactly the same way. A lot of persuasion would have to be done here.

Via: Handelsblatt

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