Germany’s tax choice

A reader's view, August 2014
OECD Observer

Your report on Germany proposes raising capital gains taxes on residential real estate (except for owner-occupied housing) to promote equity of income distribution and government revenue (OECD Economic Surveys: Germany, May 2014, see 

Yet, real estate investments present an additional private pension pot for lots of mittelstand workers in small and medium-size firms, and even the main personal pension to many who are self-employed. Instead of pressurising these stakeholders and discouraging such investments by the increasing the capital gains tax, the government should rather support real estate purchases. This could ease private pension planning and as such, be a means to counteract the steady increase of old-age poverty. Considering high tax revenue, the policy of low interest rates of the ECB and the associated insidious expropriation of depositors, an increase of capital gains taxes would further harm individual responsibility and confidence among the population.

—Julia Münch, Wald-Michelbach, Germany

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©OECD Observer August 2014 

Economic data

GDP growth: +0.6% Q4 2017 year-on-year
Consumer price inflation: 2.2% Jan 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.5% Jan 2018
Last update: 12 Mar 2018


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