SPD to push for wealth tax in Germany after summer recess

SPD General Secretary Tim Klüssendorf has said his party will make inheritance and wealth tax reforms a “key issue before the year is out”.

SPD will make wealth tax "key issue"

The SPD will focus on negotiating inheritance and wealth tax reforms with its CDU/CSU coalition partners when parliament returns from recess, General Secretary Tim Klüssendorf has announced.

Klüssendorf said that Germany’s increasing wealth inequality must be addressed. Speaking to Neue Osnabrücker Zeitung, the Bundestag member for Lübeck said the country’s “misguided” tax system meant that “profits are ending up in the hands of fewer and fewer people”.

"That is why we absolutely need changes to inheritance and gift taxes, as well as the reactivation of the wealth tax,” he added. Parliamentary sessions will resume on September 7 and will run intermittently until breaking for Christmas on December 18.

What is a wealth tax?

To break it down really simply, an income tax taxes people’s income, while a wealth tax taxes any assets they own, such as property, stocks and cash.

German wealth taxes have a long history. Germany, or more correctly Prussia, introduced a wealth tax in 1893. The tax was reformed multiple times, most notably in 1923, 1973 and 1995, when it was increased to a rate of 1 percent.

Then, in 1995, the federal constitutional court declared the net wealth tax unconstitutional on the basis that it undervalued land and property assets, which actually led to a tax advantage. The court ruled that assets must be valued equally.

The verdict was not that the wealth tax was fundamentally unconstitutional, just that the way it was being applied was unconstitutional. In fact, Article 106 of the constitution, drawn up in 1949, explicitly states that Germany’s federal and state governments can impose wealth taxes.

The 1995 verdict was controversial, and for two years the CDU/CSU-FDP government under Helmut Kohl considered how assessed property values could be reformed. But no solution was found, and the government stopped levying the wealth tax in 1997.

Why is the SPD considering a wealth tax?

So why is a wealth tax potentially back on the parliamentary agenda? Put very simply, Germany has never had so many millionaires, but the government is broke. This is because the government focuses on taxing income, not wealth, so the government sees little tax revenue from the growing number of millionaires.

According to Capgemini's 2026 World Wealth Report, in 2025, 1,78 million people in Germany had liquid assets of one million US dollars, an 11,1 percent year-on-year increase. In the country of 84 million people, the number of Ultra High Net Worth Individuals (UHNWIs) also grew annually by 1.100 to a total of 5.000 people, who altogether own 27,3 percent of the country’s total wealth.

Wealthy people can more easily buy diverse assets and invest in high-yield assets (e.g., property), which makes it easier to acquire even more wealth. This wealth is separate from income. For example, you could have a German resident who owns great wealth but has only a small income, so pays little tax.

At the same time, the CDU/CSU-SPD government is taking on increasing debt, and trying to plug budget deficits by making austerity cuts to statutory healthcare and the pension system, or increasing taxes on tobacco and sugar. These cuts put further financial pressure on low- and middle-income households.

These budgetary decisions are despite the fact that, according to a recent poll, 64 percent of Germans would support a wealth tax, 61 percent support increasing inheritance taxes and 81 percent agree that wealth is currently unfairly distributed. 

52 percent of respondents are against the government making cuts to social security benefits, namely unemployment benefits, statutory health insurance, pension insurance and long-term care insurance to reduce government spending.