How Can Germany Create a Fairer Tax System?

Authors

  • Julia Jirmann Network for tax justice
  • Vollmer Franziska Network for tax justice

DOI:

https://doi.org/10.18156/eug-2-2025-art-4

Abstract

The ability-to-pay principle, derived from the equality clause of the German Basic Law, requires taxation in accordance with economic capacity. This paper examines whether taxes on high incomes, inheritances, and gifts still comply with this constitutional standard. It focuses on whether preferential treatment of capital income and exemptions for large inherited wealth undermine the principle in practice. The analysis shows that the German tax system has become increasingly regressive at the top. The paper outlines reform options aimed at strengthening the ability-to-pay principle, restoring progressivity, and enhancing tax equity.

Author Biographies

Julia Jirmann , Network for tax justice

Julia Jirmann holds an LL.M. in Business Law from Martin Luther University Halle-Wittenberg and studied Economics and Business Administration at the University of Leipzig and in Bangkok. She previously worked for KPMG AG in International Tax and for the German Taxpayers Association. At the Network for Tax Justice, she leads the areas of inheritance and wealth taxation as well as income tax. She is also a member of the German Women Lawyers Association’s Commission on Social Security and Family Burden Sharing Law and is pursuing her doctorate at Otto von Guericke University Magdeburg.

Vollmer Franziska, Network for tax justice

Franziska Vollmer, expert in social and tax law. From 1999 to 2023, she served at the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth, and from 2011 onwards headed several departments, most recently overseeing the project on child basic security. In 1999, she earned her doctorate in constitutional law with a dissertation on the spousal splitting. From 2002 to 2005, she was a research assistant at the Federal Constitutional Court. Between October 2023 and May 2024, she chaired the Social and Tax Law Commission of the German Women Lawyers’ Association. She is currently working freelance.

Ein überfüllter Schreibtisch erstreckt sich von linken zum rechten Bildrand. Im Zentrum liegt ein geöffnetes Notebook mit einem komplizierten Haushaltsplan und Finanzdiagrammen auf dem Bildschirm. Um das Notebook herum liegen verstreut Diagramme und Papiere. Durch das Fenster im Hintergrund blickt man auf abstrakt und symbolisch dargestellte gesellschaftliche Einrichtungen: ein Krankenhaus, ein Bahnhof, eine Schule und ein Kindergarten. Erstellt mit Gemini 3.

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Published

2025-12-13 — Updated on 2025-12-15

Issue

No. 2 (2025): The other side of social justice: Fairer financing of rising public expenditure

Section

Artikel

License

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.