Abstract The debate on reintroducing a wealth tax in Germany has gained momentum amid calls for greater wealth equality and rising public financing needs. This article examines arguments for and against a wealth tax, focusing on its fiscal yield, redistributive effects, and legal as well as economic challenges. Empirical evidence suggests limited redistribution potential, high administrative costs, and significant efficiency losses. Furthermore, constitutional constraints pose additional barriers. Alternative measures—such as reforming inheritance or capital income taxation and promoting wealth accumulation—may prove more effective. The analysis concludes that a wealth tax is only marginally suitable as an instrument for achieving fiscal and distributive goals.
Beck et al. (2026) studied this question.