The Calendar Bequeaths
Addendum to “We Will Keep Inheriting”
None of the exceptions said: inheritance shall count for more than work. Each said: this property must stay together. After 150 years the result is the same.
I. Two days in Karlsruhe
On 12 and 13 October 2026 the Federal Constitutional Court heard arguments on inheritance tax. Two proceedings were before it. The Bavarian state government, whose action we described in “We Will Keep Inheriting” as Söder’s paradox, disputes the federal government’s competence and wants allowances, tax rates and the valuation of real estate adjusted to regional property prices. An heir who received a securities portfolio and real estate from his aunt complains that heirs of business assets pay almost nothing while he pays the full rate. A ruling is expected around the turn of the year.
II. The figures for 2025
In August the Federal Statistical Office reported a record. For 2025 the tax offices assessed 21.4 billion euros in inheritance and gift tax, 61 per cent more than the year before. The assets transferred came to 141.1 billion euros.
Another figure is more interesting. Business assets worth 25.6 billion euros changed hands in 2025. Of these, 4.4 billion were inherited and 21.2 billion given as gifts. Through the needs test, under which heirs of large businesses must prove they cannot pay, the state additionally waived 3.7 billion euros, 3.4 billion of it on gifts. Large companies no longer pass on when the owner dies. They pass on when the calendar is favourable.
And that is only the visible part. The statistics record only what is taxable. The German Institute for Economic Research estimates that up to 400 billion euros are inherited or given away every year. About a third of that appears in the tax offices’ files.
III. The chain
There is a history behind this, and each link has a date. The historian Marc Buggeln has traced it in “Das Versprechen der Gleichheit” (The Promise of Equality).
In 1873 Prussia introduced an inheritance tax, but spouses and children paid nothing. The tax hit the nephew, not the son. When Prussia introduced an income tax in 1891, the state reached for the salary of the citizen, not the inheritance of the landowner.
In 1919 Reich Finance Minister Matthias Erzberger presented a reform under which, for the first time, children too would pay inheritance tax, up to 35 per cent, and those who were already wealthy up to 90 per cent. In August 1921 Erzberger was shot dead in the Black Forest by two former naval officers. A year later a conservative government halved the rate for the closest relatives, and spouses were again fully exempted. The reform had needed a revolution; its reversal needed only a majority in the Reichstag.
On 12 November 1943 Hitler signed the “Decree of the Führer on the Family Enterprise of the Firm Fried. Krupp”. It made the group the family property of Alfried Krupp, expressly because of its services to the nation’s military strength. What inheritance tax Krupp would pay in future was decided by the Reich finance minister alone. No tariff, no table, a single man.
In 1946 the Allies set the top rate for direct heirs at 60 per cent. The young Federal Republic lowered it to 38 per cent in 1949 and six years later to 15 per cent.
In 1995 the Federal Constitutional Court declared the wealth tax unconstitutional because real estate was valued differently from other assets. It gave the legislature until the end of 1996. The legislature did nothing. Since 1997 the wealth tax has not been levied, although the law is still in force. The court had demanded equality. The result is that nobody pays any more, and nobody decided it. As early as 1996 the extensive exemption of business assets from inheritance tax had begun.
Since then the Federal Constitutional Court has objected to the inheritance tax three times, most recently in 2014. Each time the legislature made amendments, and each time a new exception emerged. According to Buggeln, whoever inherits a house in Munich pays 8 to 15 per cent. Whoever inherits 300 houses through a property company pays nothing.
IV. The little house as a shield
Why do so many people defend an order from which they never gained anything? A documentary by the broadcaster MDR shows a man in Thuringia who inherited nothing and is building his house with his own hands. He considers the system fair, because his children are to inherit his house one day.
His house would long since be protected by the allowances. A child can inherit 400,000 euros tax-free from each parent. So the man does not need to defend his house at all. He is being used as a shield. The little heir’s little house is used to defend the tax-free inheritance of the 300 houses. Every debate about large inheritances is turned into a debate about granny’s cottage, and on that transformation hangs the political strength of the whole order.
V. The gift
The figures for 2025 show how succession works today: as a gift during one’s lifetime, at the most favourable moment, with advisers who can read the calendar. In “Flawless Democrats” we described how in 2020 Friede Springer gave Mathias Döpfner shares worth around one billion euros and transferred to him the voting rights for her remaining stake. That was not an isolated case. It is the pattern.
VI. What follows
In 2017 the economists Facundo Alvaredo, Bertrand Garbinti and Thomas Piketty calculated how much wealth in France, Germany and Britain derives from inheritance. Until 1910 it was 70 to 80 per cent, between 1950 and 1980 only 30 to 40 per cent. Today it is again 50 to 60 per cent, and rising. The meritocracy of the post-war period was real. But it was a fresh start after two wars, an inflation and a currency reform, not a permanent state. Ludwig Erhard’s “Prosperity for All” assumed that work decides the distance between people. Today that distance is decided more and more often by a date of death or a deed of gift.
Whether Karlsruhe changes this will become clear around the turn of the year. The history since 1873 speaks against it. The court can demand equality. What the legislature has made of that has so far always been a new exception.
Further reading: We Will Keep Inheriting · Flawless Democrats · Plunder, Lease and Inheritance