‘Minimum Property’ 20,000 euros for every 18-year-old is examined by Germany

In December, while the world’s attention was focused on the emergence of the coronavirus’s micron mutation, the German Institute for Economic Research revived a centuries-old idea to help tackle wealth inequality, according to Deutsche Welle.

The Universal Basic Heritage or “Grunderbe” in German, would allocate € 20,000 to each resident when he / she reaches the age of 18. The amount will be used to cover education or training, property advances or starting a business, according to DW.

The idea is similar to Universal Basic Income, a social benefits program tested by governments around the world that gives people a minimum monthly income.

“If we really want to create prosperity for all in the near future, then we must reduce the high level of wealth inequality through redistribution: giving half of the wealthy population a basic inheritance,” said a German think tank tax expert. , Stephan Bach in his proposal.

Bach estimates that, based on the estimated 750,000 Germans growing up each year, the universal inheritance would cost the German government about 22.6 billion euros a year. It could be financed by raising the inheritance tax, introducing a tax on the super-rich and reforming real estate taxes.

Compared to other countries with a similar income distribution, wealth in Germany is highly concentrated, according to the think tank. The richest 10% own two-thirds of the total private wealth (about 12 trillion euros in assets). The richest 1% owns one third, while the richest 0.1% owns up to one-fifth.

In contrast, the lower half own little to no assets – just 1.3% of total private wealth – and have almost nothing left when family members die, according to a Forum New Economy study.

In his proposal, Bach states that the simulations showed that a universal inheritance system would limit the Gini coefficient used to measure wealth / income inequality by 5-7%. It would increase the wealth of the poorer half from 59% to 94%.

If the new coalition government of German Chancellor Olaf Solz really wanted to tackle inequality, it would have to “focus on increasing the wealth of the middle class by supporting home ownership, supplementary pensions and financial assets,” Bach said. according to a DW report.