Endangering of Businesses by the GermanInheritance Tax? – An Empirical Analysis

This contribution addresses the substantial tax privilege for businesses introduced by the German InheritanceTax Act 2009. Advocates of the vast or even entire tax exemption for businesses stress the potentialdamage of the inheritance tax on businesses, as those often lack liquidity to meet tax liability. This submissiontackles this issue empirically based on data of the German Inheritance Tax Statistics and the SOEP.The results indicate that former German inheritance tax law has not endangered transferred businesses.Hence, there is no need for the tremendous tax privilege for businesses in current German inheritance taxlaw. An alternative flat inheritance tax without tax privileges, which meets revenue neutrality per tax classaccording to current tax law, provokes in some cases relative high tax loads which might trouble businesses.