Clemens Fuest criticizes the desire of the SPD, the Greens and the Left to introduce a wealth tax – and quickly receives opposition from the chairman of the DIW, Marcel Fratzscher.
Ifo boss Clemens Fuest considers a wealth tax to be a mistake. This would considerably slow down the growth of the German economy in the years to come. “The gross domestic product, as a simulation calculation shows, would be up to 6.2% lower after eight years with wealth tax compared to without wealth tax,” said the president of the institute of research from Munich, which published a study for the Family Business Foundation on Monday.
The German Institute for Economic Research (DIW) contradicts this. “I consider that the Ifo study is incomplete and therefore that the conclusions are false,” said its chairman, Marcel Fratzscher. The crucial question is what does the state do with tax revenues? In the years to come, it will need a lot of money for future investments in climate protection, digital transformation, education and innovation. “So a wealth tax that fuels such future investments will create many good new jobs, increase growth and ensure long-term prosperity,” Fratzscher said. The point is that hardly any country in the world taxes labor and wealth more than Germany. “It is not only a problem of justice, but also an economic problem, because the work is worth less and less labor,” said the boss of DIW.
The SPD, the Greens and the Left want to reintroduce a wealth tax. This should help pay off the greatly increased debt after the Corona crisis and bring more revenue to the state. However, the plans are controversial, with the Union and the FDP clearly rejecting them. “Because the tax is difficult to lift and partially avoidable, revenues from this tax could be well below expectations,” Fuest said. The wealth tax is also intended, among other things, for a redistribution between rich and poor. According to the head of Ifo, wealth inequalities have remained constant since 2007. In international comparisons, it is often oversubscribed because the assets resulting from pension rights are hidden. “Because it plays a bigger role in Germany than in other countries,” Fuest said.