“Poison to the Economy”: (Un-)Taxing the Wealthy in the German Federal Parliament from 1996 to 2016

Abstract

AbstractThe concentration of wealth is a key component of the rise in economic inequality at the beginning of the twenty-first century. While the abolition of taxes on private wealth during the 1990s and 2000s is recognized as an important institutional driver behind this development, comparatively little is known about the justification of tax cuts for the wealthy in advanced democracies. This paper investigates how the abolishment of the personal net wealth tax in Germany, a country with high levels of wealth inequality, has been debated and justified in parliament over a period of 20 years. Using a mixed methods approach that combines computational social science methods and a qualitative analysis, we examine how Germany’s two major parties, the Christian Democrats (CDU) and the Social Democrats (SPD), have variously construed the meaning and purpose of the wealth tax and justified their support for or opposition to it. While the Social Democrats debate the wealth tax primarily from a social justice perspective, the Christian Democrats rely on an efficiency frame that invokes biological metaphors, enabling them to narrate the wealth tax as a threat to the social body. Paradoxically, then, by arguing that the tax is “poison to the economy”, conservative discourse succeeds in linking opposition to the wealth tax to a principle of social unity. On these grounds, we suggest that future research should scrutinize how the interrelation between political discourse and institutional architectures has facilitated the rise of wealth inequality in recent decades.