The author of this text is Jan Schnellenbach, economist and professor at the Technical University of Cottbus-Senftenberg.
After all, the rich must pay higher taxes: thanks to this demand, much of the German party spectrum hopes to win new voters. In turn, German citizens wonder who is considered rich anyway. While ARD presenter Louis Klamroth assumes wealth with a gross income of PLN 70,000. euro, i.e. 269 thousand PLN (annually, not monthly!), the last jump in the income tax table for single people, known as tax on the richstarts only from PLN 277,000. EUR 826 (PLN 1,176,000).
Also, scientific definitions of wealth are ultimately arbitrary. With regard to income, the limit adopted is twice the so-called median net income equivalent. In this case, actual income is weighted by the number of household members. According to this criterion, a single person with a monthly net income of just over EUR 4,800 (about PLN 20,000) is considered rich, and a family with two children – from just over EUR 10,000. euro (over PLN 42,000) net. However, the Institute of German Economics applies more stringent thresholds.
According to him, a single person would have to earn almost EUR 5,800 (PLN 24,500) net to be rich, and a family would need over PLN 12,000. euro (PLN 50,800).
However, it seems that wealth is less determined by high income and more by stable assets. Data on this topic are collected only sporadically; in 2023, the Bundesbank has set a threshold of approximately PLN 780,000 for net wealth – i.e. the financial surplus that remains after deducting debts from assets. euro (PLN 3,302,000). If you exceed it, you are entitled to 10%. the richest households in the country. The richer half belongs to the amount just above PLN 100,000. euro (PLN 423 thousand). The number of billionaires is also decreasing: Forbes magazine currently counts 212 of them in Germany.
Contrary to popular belief, wealth inequality in Germany has not increased significantly for decades. Share of the richest one percent. in total wealth has barely increased since the late 1950s, and the Gini coefficient (a measure of income and wealth inequality in society) has fluctuated only slightly since reunification, according to a study by DIW Berlin. The fact that wealth inequality is nevertheless high in international comparisons can largely be explained by the fact that low-income German households do not accumulate capital in old age. Or they are unable to do so due to high contributions to statutory pension insurance financed by the pay-as-you-go system.
Comparing the situation in Germany with that in other European countries, it is clear that there are primarily two solutions to the problem of the significant lack of wealth in the lower half of the wealth distribution. One of them is easier access to housing property. Nothing builds wealth in a more disciplined way than making a monthly transfer to pay off your mortgage instead of paying your rent. The second solution is a gradual transition from a statutory pension system to a system with stronger capital coverage.
Nothing out of the ordinary so far. However, public debate continues to raise extreme expectations about the extent to which higher taxation on high incomes and wealth can help finance public spending. The thinking is downright magical: no matter what you want – whether it's free local transport, solar subsidies, or an unconditional basic income – when asked about financing, the answer is always higher taxes on the “rich”.
The article continues below the video
The disastrous effect of a tax on the rich: even more Germans emigrating
However, Germany currently competes internationally in two respects. Firstly, it is about qualified specialists that we urgently need, and secondly, it is about entrepreneurs' decisions regarding the location of investments. If we look only at the emigration of German citizens, recent years have seen a high negative migration balance (100,000 more people leaving than arriving in 2025 alone). It is estimated that three quarters of emigrants have higher education.
Of course, not everyone leaves because taxes are too high; some also take to the road because of excessive bureaucracy. But we will not be able to afford to drive out even more qualified people with even higher taxes and discourage immigrants ready to work. We are notoriously poor at helping unskilled immigrants advance in education.
Therefore, it is not recommended to introduce higher income taxes in the upper part of the income distribution. Nor should we place great hopes on the restoration of the wealth tax. Currently, only a few advanced economies levy a net worth tax. In recent decades, the trend in this respect has clearly been towards the abolition of this tax.
The reason for this is the disproportion between high collection costs and low tax revenues. Property taxes are very bureaucratically expensive; property valuation requires a lot of work. This cannot be oversimplified – then the principle of equal treatment of taxpayers with equal ability to pay is violated, which led to the suspension of this tax in Germany in 1997 by the ruling of the Federal Constitutional Court.
Spain and France are two countries that still charge wealth tax. In both countries it accounts for much less than one percent of total tax revenues. The exception is Switzerland, where the wealth tax accounts for almost seven percent. tax revenues. However, Switzerland is also an exception in another respect: it does not impose a tax on private capital gains; the wealth tax serves as a substitute for the capital gains tax.
In Germany, a wealth tax that would be consistent with the constitution and would not threaten the attractiveness of the location would do little. And the revenues from it would go to the federal states, not the federal government. So it's time to put an end to magical thinking about taxes: we will heal public budgets only by cutting expenses or by burdening many citizens, not just a few, for example through higher taxes on income. Higher burdens on the rich will not save public finances.
I’m Ashley Davis as an editor, I’m committed to upholding the highest standards of integrity and accuracy in every piece we publish. My work is driven by curiosity, a passion for truth, and a belief that journalism plays a crucial role in shaping public discourse. I strive to tell stories that not only inform but also inspire action and conversation.
