Top German official: wealth tax would harm the economy

Sat, Sep 6, 2025, 4:44 AM 1 min read

Instituting higher tax on the richest people in Germany would hurt the economy because such a measure would not only affect rich individuals but would primarily hit medium-sized companies, Chancellor Friedrich Merz's chief of staff said on Saturday.

"The debate about higher income tax at the upper end is a simplified debate," Thorsten Frei told the Rheinische Post in a story published on Saturday.

"It gives the impression that it is only about wealthy private individuals," he said.

But it would mainly hit medium-sized companies, he said.

"Around three-quarters of all German businesses pay income tax as partnerships. If there is one thing we do not need, it is higher taxation of economic activity," he said.

Tax increases are being pushed primarily by the Social Democratic Party (SPD), the junior coalition partner to Merz's conservative bloc.

The chairman of the Christian Democratic Employees' Association disagrees with Frei's position, saying "the wealth tax could be raised slightly" and taxes on middle-income earners "could be reduced."

"We agree with the SPD that stronger shoulders must carry more than weaker ones," Frei said. "But that is already the case."

He added that it is the responsibility of Finance Minister Lars Klingbeil, the SPD leader, to present proposals for a legally compliant budget.

"On difficult issues that demand something from people, we must reach joint conclusions."