Thesencheck: Über diese 9 Behauptungen zur Erbschaftssteuer muss diskutiert werden

Summary

Professor Martin Ruf examines nine common claims about inheritance tax. His overall argument is that inheritance tax raises relatively little revenue and should not be treated as a solution to every form of inequality. However, existing exemptions—especially for business assets—raise questions of fairness. He also stresses that the effects of taxation depend on its design and rate.

1. “Inheritance tax unfairly taxes income twice”

Ruf argues that this claim confuses the deceased’s tax history with the heir’s situation. The heir receives an asset without having paid tax on it; taxing a transfer to a new recipient is not the same as taxing the deceased’s income again.

He compares it to a hairdresser receiving payment from a customer’s already-taxed income: that does not exempt the hairdresser’s profit from tax.

2. “Inheritance rules protect large fortunes and make opportunity unequal”

Ruf focuses on the preferential treatment of business assets:

• He presents figures suggesting that the value of business assets declared for inheritance tax and the tax relief granted to them have been almost equal. In effect, he says, declared business assets are largely exempt.
• Business wealth is much more important to the top 1% than to the broad middle of society.
• Very wealthy people may be able to convert non-business assets into business assets for tax purposes with the help of specialist advisers.
• Many households are protected by tax-free allowances. Ruf gives the allowance as €400,000 per parent and child; for two parents and two children, that can amount to €1.6 million.
• He disputes the frequently cited estimate that €400 billion is inherited annually in Germany. He says official inheritance-tax statistics record roughly €100 billion, while noting that many small, non-taxable transfers may not be reported and that declared values may be understated.

In Ruf’s view, the current system’s main fairness problem is that very wealthy people who hold business assets can pay little or no inheritance tax on them.

3. “Higher inheritance tax would endanger family businesses and jobs”

Ruf says the evidence he discusses does not support this concern:

• A forced sale would not necessarily destroy jobs: a buyer, like the original owner, has an incentive to run a productive business.
• In research comparing German family businesses that were sold or inherited over roughly 20 years, employment increased in both groups. The increase was greater among sold businesses.
• If heirs need time to pay, the government could allow tax payments to be deferred over years or even decades.
• Ruf acknowledges that any tax can reduce incentives to invest. If business assets were taxed, he suggests that moderate rates such as 10% or 15% would be more prudent than assuming there would be no economic effects.
• He also questions the apparent imbalance between business assets receiving near-total exemption and earned income being taxed at rates that can reach around 50%.

4. “Inheritance tax is necessary to correct the widening income gap”

Ruf presents evidence suggesting that inheritances are not the main source of income for most people:

• A Norwegian study covering 20 years found that inheritances and gifts made up less than 5% of people’s total income on average.
• Ruf says a rough German comparison for 2009 produces a figure just above 3%, though he cautions that Germany lacks Norway’s detailed individual-level data.
• Inheritances are much more important for a small group: in the Norwegian study, the 1% receiving the largest inheritances derived at least 30% of their disposable income from inheritances and gifts.

Ruf therefore sees inheritance tax as potentially relevant to the very wealthy, but argues that broad income differences are more directly addressed through income tax. For most people, earned income remains the main source of income.

5. “Most wealth is very old; Germany is an inheritance society”

Ruf treats this claim as partly true but too broad as a description of society:

• He cites claims that roughly 75–80% of billion-scale wealth was inherited or received as gifts rather than created within the current generation.
• He accepts that a small financial elite derives a large share of its wealth from inheritances.
• However, he says this does not describe most people. For the wider population, differences in earned income remain important, and he argues that performance and work still matter for most people.

6. “The correct inheritance-tax rate is zero; countries that abolished it succeeded”

Ruf calls this claim too simplistic. It is not possible to attribute a country’s economic performance to abolishing inheritance tax simply by comparing growth before and after the change. Austria abolished its tax in 2008 while other policy changes were also taking place, so more careful analysis would be needed to identify the effect of that particular reform.

7. “Inheritance-tax revenue is only symbolic”

Ruf agrees that the tax is small relative to the state’s overall finances, but says this does not settle the fairness question:

• He puts current inheritance-tax revenue at about €10 billion, compared with roughly €15 billion from tobacco tax.
• He estimates that, if about €40 billion in declared business assets were taxed, a 10% rate would raise around €4 billion, while a 20% rate would raise around €8 billion in additional revenue.
• He says those amounts would not solve the state’s broader funding needs. The issue, in his view, is also whether the very wealthy should receive such extensive exemptions.

8. “Higher taxes will drive wealthy people abroad”

Ruf says that some response is to be expected, but its scale depends on the tax and who is affected:

• A study of Sweden’s wealth tax found evidence that the wealthiest people were more likely to emigrate while the tax was in place. However, the overall emigration rate among those affected was still low—around 0.15–0.2%—and the estimated difference associated with the tax was small.
• A US study found that states with their own inheritance tax, in addition to the federal tax, lost about one-third of their billionaires.

Ruf’s conclusion is that migration responses are real, but vary substantially by jurisdiction and policy design.

9. “Each German state should set its own inheritance tax”

Ruf argues against shifting inheritance tax entirely to the states:

• A speaker in the video suggests that states should be able to set different rates, pointing out that Bavaria generates about one-third of Germany’s inheritance-tax revenue.
• Ruf expects state-by-state rates to encourage wealthy people to move from higher-tax to lower-tax states. He thinks the effect could be stronger in Germany than in the United States because German states are smaller and there would be no federal inheritance tax to remain in force.
• He warns that this could undermine the tax in the states that retain it and ultimately lead to its de facto abolition.
• He considers international coordination theoretically helpful in limiting tax-driven relocation, but unlikely, since some places deliberately attract wealthy people with low taxes.

Speakers and sources featured

Speakers

• Prof. Dr. Martin Ruf, Professor of International Business Taxation at the University of Tübingen, presents and evaluates the claims.
• Unidentified speakers in brief clips: one argues that the wealthy should be taxed more; another, speaking for or invoking the Free Voters, calls for abolishing inheritance tax; and another advocates letting German states set their own rates. Their names are not given in the subtitles.

Research and data sources mentioned

• German Federal Statistical Office inheritance-tax statistics.
• A working paper by Martin Ruf and Stefan Moderau on the tax treatment of business assets.
• Research by Moritz Schularick on wealth distribution.
• A Norwegian study using individual-level income, inheritance, and gift data.
• A study involving authors from the University of Berkeley on Sweden’s wealth tax and emigration.
• A US study of billionaire migration in relation to state inheritance taxes.
• Examples discussed: Sweden’s wealth-tax abolition in 2007 and Austria’s inheritance-tax abolition in 2008.