From now until 2027, the yearly heritage volume in Germany will be 400 Billion Euros. In essence, this means that 400 Billion Euros will find “new owners” every year. These new owners are among 10% of the German population (obviously the top 10% from a wealth perspective). And they are paying in average about 8 Billion Euro tax for this heritage (which is 2%). Every year.
The volume itself is massive and can be discussed, as well as the tax amount, that is paid for this. But I am wondering what this “richness” does to the efficiency and performance ethos of our society.
When the most wealthiest 10% of the population are passing on 400B€ each year to the following generations – how does this impact their willingness or capability to deliver great performance to the society and, as such, make sure that the economy is/thrives on the highest levels?
When you inherit something, you can just look at that in your very personal cosmos. You receive something, you did not have to work for, you can use that as you want to, and you can feel lucky, that you are one of the few people receiving such gift. You take it into your “wealth” and live with it.
Another perspective can be, that you are receiving this wealth with an obligation to keep it at this level or even continue to grow it. Because it is an obligation to society and economy in general. Reason is, that these heritages are in general driving the economies and are essential to provide jobs, develop infrastructures, fuel financial systems and make sure that society can develop in liberal democratic systems. If this perspective is neglected, the efficiency and performance of an economic system will gradually decrease. The responsibility of a heritage has to be acknowledged and taken care of.
If this responsibility isn’t taken serious or even ignored, the consequences for the society and the economic systems will be severe.
Looking at Germany there are discussion, that the majority of the inheritors are not taken this responsibility serious. Instead they inherit the wealth and make sure that their lives remain good and safe. Which fuels the huge difference between rich and poor even more and generates even more social conflicts.
With attention to this topic and clarity around the importance of the impact, the political systems can have influence. Instead of just taxing the pure “passing on”, it could be thought about to tax based on the future development of this wealth. And the politicians should not look for the huge lobby work that the rich part of the society is putting up. They should look what is good for the entire society they are in charge of.
