Leading members of Germany’s center-left Social Democratic Party (SPD) have proposed a new billionaire tax to address growing disparities in wealth. The tax would impose a minimum levy on fortunes exceeding €100 million, generating significant revenue for public projects.

Achim Post, deputy leader of the SPD, and Wiebke Esdar, the party’s deputy parliamentary group leader, are advocating for a two-percent annual tax on assets above €100 million. The proposal aims to address what they perceive as systemic shortcomings in the income tax system, which disproportionately advantages ultra-wealthy individuals. According to the politicians, billionaires often pay a smaller percentage of their wealth in taxes compared to average workers.

The lawmakers argue that this policy could generate approximately €17 billion annually for Germany, funds that could be directed toward alleviating the tax burden for lower-income earners or improving public infrastructure, such as schools and transportation networks. Their rationale highlighted the widening gap between those with substantial financial capital and ordinary citizens struggling to build assets. “For the wealthy, their money works for them, while others face upward financial struggles akin to climbing a downward escalator,” the duo stated in their policy pitch.

Meanwhile, Finance Minister Lars Klingbeil has announced that the German Cabinet is set to approve broader income tax reforms in the coming week. These reforms, agreed upon earlier in July by the coalition government, aim to reduce taxes on smaller and middle-income brackets by €10 billion by 2028. However, the inclusion of a billionaire tax has faced resistance from coalition partners in the conservative CDU/CSU, who warn of potential risks to the economy. Critics have also argued that the reforms fail to address inflation-induced tax pressures, but SPD leaders counter that the benefits of redistributing wealth outweigh the detriments of maintaining the status quo.