Assets have so far been underestimated
German super-rich own 1.4 trillion euros
December 11, 2023, 4:34 p.m
Estimates so far suggest that the total amount of billion-dollar assets in Germany is around 900 billion euros. A current survey comes to the conclusion that it could be much higher and is only spread across around 4,300 very rich households.
The assets of super-rich households in Germany could be far greater than expected: the more than 200 billion in assets alone are likely to add up to around 1.4 trillion euros. This emerges from a study published by the trade union-affiliated Düsseldorf Hans Böckler Foundation. The previous “rich lists” significantly underestimated wealth. The researchers therefore point out data gaps – and analyze the development of tax rates for income from assets worth billions.
The recently updated “Rich List” from “Manager Magazine” estimated the total billion-dollar assets so far to be around 900 billion euros. However, according to the Böckler study, there are likely to be more assets worth billions than previously assumed: the researchers say they identified eleven additional assets worth billions. They also assume that the known super assets were partly undervalued in previous analyses. In fact, the value of Germany’s billion-dollar assets is likely to be at least around 1.4 trillion euros – but even two trillion does not seem implausible to the study authors.
If the number is plural, one cannot speak of “entrepreneurship”.
The 1,400 billion euros correspond to a good third to half of the annual German gross domestic product (GDP). These assets are distributed among only around 4,300 very rich households. According to the survey, most of the over 200 billion assets are associated with large companies and mostly belong to members of the current or former owner families.
In almost every fifth case, the current assets are essentially based on the sale of the company. And even if families are still economically linked to a company, it is only managed by family members in just over half of these cases.
In the other half, the family’s role is limited to membership in the control committees or a silent partnership. In the case of the majority of billion-dollar fortunes, it is therefore not possible to speak of “entrepreneurship” as a direct source of wealth, say those responsible for the study, Julia Jirmann and Christoph Trautvetter from the Tax Justice Network – contrary to what interest groups of wealthy people often portray. Even more than thirty years after reunification, there is no East German billionaire company, at least according to the available data.
“Very incomplete” data
According to the Böckler Institute, the study also shows that the taxation of income from assets worth billions is usually much lower than it was almost 30 years ago. In addition to the suspension of wealth tax, the tax rate on undistributed profits has roughly halved since 1996 – from over 57 percent to under 30 percent. In comparison, the tax rate on average employment income fell only slightly from 21 to 18 percent over the same period.
The researchers also analyze typical reservations about greater taxation of very high assets. Based on their data, for example, they do not expect increased legal tax evasion as a reaction to higher taxes – among other things because the so-called exit tax now makes moving less attractive. In addition, various reforms have made it more difficult to move large assets abroad.
Nobody knows exactly how much the super-rich in Germany really own: the two authors of the study criticize the “very incomplete” data. Where there is a lack of information, lobbying has an easy time of it. They are therefore calling for more independent wealth research. For their study, they used the annual “billionaire lists” published by the business magazines “Forbes” and “Manager-Magazin” as a starting point. They also integrated information from other publicly available sources such as company databases.