Artikel
Inheritance tax: Limit corporate privileges and spread tax burden
After the inheritance tax ruling by the German Federal Constitutional Court, legislators will have to limit the wide-ranging exemptions on company assets. In recent years, they have exempted half of all assets subject to inheritance tax. In particular, large transfers consisting mainly of corporate assets benefit from the favorable conditions. In 2012 and 2013, over half of all transfers of five million euros or more were tax exempt, and over 90 percent of transfers of 20 million euros or more. Revoking these company privileges would increase annual inheritance tax revenue from the current five billion euros to 13 billion euros in the medium term at present tax rates. The extensive exemption regulations are not required in larger companies to prevent job losses in the event of business succession and are sometimes even counterproductive. Allowances or deductions should be limited to required operating assets and be offset against other transferred assets or against the assets of the beneficiary. Tax burdens on corporate assets should be deferred or annuitized with no specific conditions over long periods in order to allow the corporate successor to pay them off using current revenues. Furthermore, other liabilities could be given priority over the tax claim or it could be pegged to the commercial success of the company. This would avoid complicated means testing. In addition, further tax benefits should be reduced or revoked, such as tax exemption of the family home or tax exemption for donations.
- Language
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Englisch
- Bibliographic citation
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Journal: DIW Economic Bulletin ; ISSN: 2192-7219 ; Volume: 5 ; Year: 2015 ; Issue: 7 ; Pages: 91-99 ; Berlin: Deutsches Institut für Wirtschaftsforschung (DIW)
- Classification
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Wirtschaft
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Personal Income, Wealth, and Their Distributions
Entrepreneurship
- Subject
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inheritance and gift taxation
top wealth distribution
family firm succession
- Event
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Geistige Schöpfung
- (who)
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Bach, Stefan
- Event
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Veröffentlichung
- (who)
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Deutsches Institut für Wirtschaftsforschung (DIW)
- (where)
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Berlin
- (when)
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2015
- Handle
- Last update
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09.05.2025, 4:45 PM CEST
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Bach, Stefan
- Deutsches Institut für Wirtschaftsforschung (DIW)
Time of origin
- 2015
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"The tax burden is surprisingly evenly distributed": Five questions for Stefan Bach
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Fundamental Reform of Income Tax: In How Far Can the Assessment Basis Be Broadened and Tax Law Simplified?
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The impact of losses on income tax revenue and implicit tax rates of different income sources: evidence from microsimulation using tax statistics for Germany
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Income tax reform to relieve middle income households