Hospital Crisis and AI Disruption Haunt Germany’s Tax Reform Push as Coalition Fights Over €5 Million Inheritance Allowance
14.06.2026 - 00:32:02 | boerse-global.de
Nearly half of Germany’s hospitals face insolvency, the Caritas charity has warned, as the ruling coalition struggles to finalize a broad reform package on pensions, taxes, and labor before the summer break. In North Rhine-Westphalia, clinics took to the streets to protest the health ministry’s savings plans, which Health Minister Warken hopes to lock in through a new “contribution rate stabilization law.” The measure is designed to keep premiums flat despite an expected 3.5 billion euros in additional costs, but a 2.5-billion-euro financing gap is already predicted for 2027.
Thuringia’s interior minister, Georg Maier, cautioned that the planned cuts to health and care funding risk eroding public trust in democracy. Social anxieties, he argued, could drive more voters toward extremist parties. The warning adds political pressure to a coalition already split over revenue-raising options.
At the center of the tax debate is an SPD proposal for a flat inheritance-tax allowance of five million euros for businesses. Party chair Bärbel Bas told a delegate conference in Düsseldorf on Saturday that reforms must tangibly improve people’s living conditions. Larger fortunes would be taxed over a longer period under the plan, which aims to ease the burden on smaller inheritances while making the wealthy pay more. Business groups and the CDU/CSU quickly pushed back at the “Day of the Family Business” event in Berlin.
Chancellor Merz is simultaneously pushing a so-called “lawnmower method” — across-the-board subsidy cuts — to help fund an income-tax reform. Merz admitted difficulties with implementation, particularly regarding the diesel tax break and renewable-energy subsidies. Economy Minister Reiche is already drafting a reform of the Renewable Energy Sources Act (EEG).
Economist Marcel Fratzscher called the tax overhaul the government’s biggest hurdle. He advocates a two-percent wealth tax on net assets exceeding 20 million euros, which he says could generate up to 40 billion euros in annual revenue. Berlin’s governing mayor, Kai Wegner, expressed openness to a wealth tax in mid-May, drawing immediate rejection from within his own Union party.
A separate risk to social-security financing, Fratzscher and other experts note, is the artificial-intelligence boom. AI is increasingly cited as a reason for layoffs, threatening to shrink the wage-based tax base. Policy circles are debating higher profit and consumption taxes as well as a citizen fund as possible remedies.
On June 20, a demonstration against social-state cuts is planned in Kassel. Organizers are protesting reductions in education and health spending, proposals to raise the retirement age, and what they see as an unfair inheritance-tax regime. They are calling instead for more investment and a reform of the inheritance levy.
