A recent study by Julia Jirmann and Christoph Trautvetter outlines gaps in wealth assessment and taxation, presenting an alternative wealth report.

In a recently published study by the Hans-Böckler-Stiftung, the authors critique the methodology of the government wealth report, arguing that it inadequately distinguishes between the wealthy and super-rich. The problem, they contend, lies in the analysis of very high incomes and wealth relying on non-representative household surveys and rich lists created for journalistic purposes.

The study aims to address these methodological gaps, conducting a comprehensive analysis of billion-dollar fortunes in Germany and providing a consistent dataset for scientific analysis. This approach also aims to dispel myths surrounding the structure and taxation of billion-dollar fortunes. The authors emphasize that many knowledge gaps about the super-rich could be closed with publicly available information, laying the groundwork for an alternative wealth report.

By comparing rich lists from Manager Magazin and Forbes, the study identifies eleven additional billion-dollar fortunes overlooked in most analyses of wealth distribution. Furthermore, a detailed analysis reveals that privately held wealth, particularly that funded by reinvested profit distributions, is underestimated, potentially leading to undervaluation of associated companies.

Contrary to the common notion that billion-dollar fortunes are primarily associated with family businesses, the study's data analysis shows that every fifth billion-dollar fortune is not or no longer based on a family-connected enterprise. The sale of companies and reinvestment of proceeds in the financial market are significant reasons challenging the idea that all billion-dollar wealth is entrepreneurial.

The analysis of wealth structure also sheds light on gender dynamics, indicating that only half of the remaining "family businesses" are led by the family, with female leadership and ownership playing a minimal role. Notably, according to the study's data, there is still no East German billionaire-owned company over thirty years after reunification.

Finally, the study explores the taxation of earnings from billion-dollar fortunes, revealing a significant decline in corresponding tax rates since 1996. Besides the suspension of the wealth tax, the halving of the tax rate on undistributed profits stands out, while the tax rate on average labor income has only slightly decreased.

Expanding the analysis to the top 1,000 German fortunes and their associated companies could capture a significant portion of the wealthiest 0.1 percent of the population (about 40,000 households) and a large part of their wealth, offering a nuanced understanding of their wealth and societal influence.

In the context of an alternative wealth report, the working paper shows that the consolidated billion-dollar fortunes in the dataset are owned by approximately 4,300 households. Extending the analysis to the entire list of the 1,000 largest German fortunes, their associated companies, and the underlying owners could encompass a substantial part of the richest 0.1 percent of the population and a significant portion of their wealth.

While some billionaire-owned companies utilize legal exemptions or holding companies abroad, publicly accessible corporate reports and ownership data provide a rich resource for analyzing the societal significance of these fortunes, covering about 90 percent of billion-dollar fortunes.

The full study is available here.