Are family businesses the new enemy? Green capital tax would increase tax burden by 20.9 percent
Munich, 26.04.2013

Are family businesses the new enemy?
Green capital tax would increase tax burden by 20.9 percent

The Chairman of the Board of the Foundation for Family Businesses, Prof. Brun-Hagen Hennerkes, criticized the controversial capital tax planned by the Greens: "Despite all the protestations of wanting to spare business assets, the capital tax has a dramatic impact on the tax burden of businesses. An annual charge of 1.5 per cent over ten years on the market value of a company may at first seem slight to the layman. But the tax payments of a large family business (total including shareholder burden) would increase by 20.9 percent only due to this capital tax.

Some members of the Green party are deluding themselves if they really believe that companies would be spared if the government recieves this tax income at the shareholder level. It is characteristic of family businesses that the owners’ assets are largely invested in the company itself. Additional enforced tax burden on owners reduces the scope for the formation of risk capital for investment and research. Are family businesses the new enemy of the Greens? Overall, the proposals of the Greens (increased top rate of tax, progressive taxation of capital income, no splitting) amount to an enormous tax burden of 36 percent. In a comparison of the 27 EU Member States, Germany would end up, upon implementation of the Green programme, on the penultimate place in corporate taxation - with serious competitiveness implications. In Europe, only France taxes its businesses more.

The green capital tax is retroactive and would be back charged to the first valuation date January 2012. Thus legal security would be hurt, which plays a very big role, especially in terms of tax law when planning extensive operational but also private decisions. This is unacceptable for family businesses, from a business as well as a personal point of view.

It would be better if the party would heed the advice of a veteran Green. Ralf Fücks, the Chairman of the Heinrich Böll Foundation, writes in his new book, “Intelligent growth”: It is a mistake “to paint all businesses as enemies that you have to curb as much as possible rather than to see them as a productive force. Innovative solutions, new products and technologies do not come from administration. Greens should urgently disarm business leaders as their enemy and waive the capital tax."

The figures on the tax burden have been recently calculated by the Centre for European Economic Research (ZEW) in Mannheim for the Foundation for Family Businesses. Hereby, a tax burden for a model company was calculated at 126.4 million euros.

For more information:

Hartmut Kistenfeger

Head of Communications and Programs

Stiftung Familienunternehmen
Prinzregentenstraße 50, D-80538 Munich

Phone: +49 (0) 89 / 12 76 400 06
Fax: +49 (0) 89 / 12 76 400 09

E-Mail: kistenfeger(at)

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