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Inheritance tax-exempt transfer of German businesses: Imperative or unjustified subsidy? An empirical analysis

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  • Houben, Henriette
  • Maiterth, Ralf

Abstract

This contribution addresses the substantial tax subsidies for businesses introduced by the German Inheritance Tax Act 2009. Advocates in favour of the vast or even entire tax exemption for businesses stress the potential damage of the inheritance tax on businesses, as those often lack liquid assets to meet tax liability. This submission tackles this issue empirically based on data of the German Inheritance Tax Statistics and the SOEP. The results indicate that former German inheritance tax law has not endangered transferred businesses. Hence, there is no need for the tremendous tax privilege for businesses in current German inheritance tax law. A virtual uniformed inheritance tax without tax privileges, which meets revenue neutrality per tax class according to current tax law, provokes in some cases relative high tax loads which might trouble businesses.

Suggested Citation

  • Houben, Henriette & Maiterth, Ralf, 2009. "Inheritance tax-exempt transfer of German businesses: Imperative or unjustified subsidy? An empirical analysis," arqus Discussion Papers in Quantitative Tax Research 95, arqus - Arbeitskreis Quantitative Steuerlehre.
    • Handle: RePEc:zbw:arqudp:95
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    Cited by:

    1. Henriette Houben & Ralf Maiterth, 2010. "Breite Bemessungsgrundlage und niedriger Proportionaltarif als alternative Erbschaftsteuerreform – Eine empirische Analyse," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 11(2), pages 204-222, May.
    2. Christiane Gross & Kerstin Lorek & Friedemann Richter, 2017. "Attitudes towards inheritance taxation – results from a survey experiment," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(1), pages 93-112, March.
    3. Christiane Gross & Kerstin Lorek & Friedemann Richter, 2017. "Attitudes towards inheritance taxation – results from a survey experiment," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(1), pages 93-112, March.

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