Half of Germany’s population does not have any savings. A financial push—funded by the taxpayer—is now supposed to bring ‘justice’ to those who have no savings and no inheritance to look forward to. The proposal would mean that €20,000 would be given by the state to anyone turning 18. The total cost for this economic ‘gift’ would amount to €15 billion annually, as estimated by the German Institute for Economic Research (DIW), the think tank of SPD and the Green party.
The ‘basic inheritance’ is the newest suggestion from liberal politicians after the ‘basic income,’ as reported by the Deutsche Welle. In theory, it is supposed to equalize chances for success in education and facilitate employment, but the reality looks different. The money would not be paid out in cash, but would only be allowed to be used for specific purposes, such as financing education, purchasing residential property, start-up or self-employment, furthering education, or as compensation for loss of income due to unemployment or illness.
The proponents of the ‘basic inheritance’ use the slogan “prosperity for all,” and thereby propagate a large-scale redistribution of wealth from top to bottom. Their aim is to tax the top 10%. DIW researcher Stefan Bach advocates higher inheritance taxes, higher taxation of real estate gains, or the reintroduction of a wealth tax, as reported by Focus. Bach argues:
The high wealth inequality should be reduced by redistribution: by giving the propertyless half a basic inheritance to build up wealth, financed by taxes on high wealth.
The basic misconception is that this new taxation would mean significantly higher inheritance tax for the “upper 10%.” On the contrary: the lion’s share would affect family entrepreneurs, since the private assets of the top 10% are tied up in companies, as Hugo Müller-Vogg comments.
Since the money would come with strings attached, it is not difficult to imagine that a new bureaucratic body would need to be formed to control the use of the basic inheritance. Every year, the receivers of this basic inheritance would grow by 750.000 people which would thoroughly overwhelm the existing bureaucratic administration. The accounts of the young people would need to be monitored and a leviathan of bureaucratic control would need to be put in place.
“The review of the ‘utilization requirements’ would turn into a huge job creation program for experts of all kinds and not least for lawyers and judges. After all, if payouts were rejected, those affected would go to court in droves— no doubt at the expense of the public purse,” comments Müller-Vogg.
The basic inheritance would be one or the other: a massive invitation to spend money to a demographic not necessarily equipped with the best counsel to do so, or become a massive bureaucratic ordeal, overstraining the recipients with endless conditions and stipulations. Either way, it would mean yet another socialization of capital administered by the tax system.