‘When will you tax extreme wealth?’ the super-rich ask

Europe’s shift to right makes change unlikely

Generally, it does not make sense for a country to act alone when imposing taxes on large fortunes. “Bigger, international companies and, of course, the super-rich all play to the tune of international law,” continued Bach, explaining that billionaires could easily relocate to other countries with more favorable tax legislation. “Nothing is gained if, in the end, it’s only the well-behaved German small and medium-sized companies that get fleeced because they remain loyal to their country.”

However, he pointed out that generating more income for state coffers through a balanced combination of tax increases on the top income bracket or with a wealth tax was possible. “But, of course, this can only be done in a way that is coordinated internationally,” he said, adding that there had been some successful attempts to curb tax evasion by large corporations in 2021.

Over 130 countries, which together account for 90% of the world’s economic output, had also agreed on aminimum 15% tax rate for companies, and in so doing were trying to prevent companies from just moving onto other countries with better tax rates. Last year, several EU lawmakers proposed a similar global minimum tax on extremely high private wealth.

But Bach doubted that there would be any developments on this front in the near future, and this was partly to do with the general shift to the right across Europe.

“There are hardly any left-wing majorities left,” he said, explaining that when it came to tax measures, it was important to have conservative and liberal parties on board, but these were inherently more business-friendly. He said that in Germany, nothing would happen “in the foreseeable future,” and it was “even more difficult to coordinate something like this on an international scale.”

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