State start-up capital of up to 20,000 euros for all 18-year-olds in Germany – that’s what Eastern Commissioner Schneider is proposing. This should be financed through a higher inheritance tax.
The Federal Government’s Eastern Commissioner, Carsten Schneider (SPD), has suggested that all young people in Germany should receive a larger one-off payment when they reach the age of majority. “All 18-year-olds should receive up to 20,000 euros as starting capital from the state,” said Schneider to the “Rheinische Post”. This should be financed through a higher inheritance tax.
“That would help to reduce the wealth inequality between rich and poor,” said Schneider. He supported proposals for a so-called basic inheritance. “The state could finance this with a higher inheritance tax for aspiring millionaires,” suggested the SPD politician .
Wages equalize, but assets do not
Schneider emphasized that people in East Germany in particular had significantly less wealth than West Germans. However, he still sees a chance of equalization when it comes to income. “We will see further wage equalization. There is now a more self-confident East German workforce that can no longer be fobbed off with cheap wages,” emphasized the SPD politician. Skilled workers are also scarce in the East, so employers will have to pay higher wages.
The basic heritage model was recently developed by the German Institute for Economic Research (DIW).