This heiress wants to tax the rich. And she’s giving away $27 million.
This week, she announced the formation of a citizen’s council in Austria that will receive 25 million euros, or $27.4 million, from her inheritance and decide on its redistribution.
“I have this money because the government has failed to fulfill its mandate to ensure that wealth is distributed in society in such a way that it doesn’t end up unequally in my hands, just because I’m in this world in this particular family with this surname,” Engelhorn said in a German-language news conference.
She belongs to a small club of the world’s uber-wealthy who advocate for tax justice by demanding higher taxes on the top 1 percent. In 2021, she co-founded Tax Me Now, a collective of wealthy people in German-speaking countries, to address extreme inequality resulting from tax policies. Heirs like herself, Engelhorn says, do not pay taxes on inheritances and thus give almost nothing of their wealth back to society.
“In Austria, the richest one percent of the population hoards up to 50 percent of the net wealth. This means that one hundredth of society owns just under half of the wealth,” she wrote in a statement. “And 99 percent of people have to make do with the other half.”
She is a descendant of Friedrich Engelhorn, who founded BASF in Germany in 1865, now one of the world’s biggest chemical companies. The money she is giving away, according to her initiative Guter Rat für Rückverteilung (Good Counsel for Redistribution), comes from an inheritance received from her grandmother. It was not immediately clear how much of her fortune she will retain after giving away $27.4 million.
Austria abolished inheritance and gift taxes in 2008. In the United States, there is no federal inheritance tax, although a handful of states impose a tax on inheritance, according to research from the D.C.-based Urban Institute.
As a first step, 10,000 citizens across Austria were sent invitations this week to participate in the council, Guter Rat said, adding that 50 people who best reflect the composition of the country’s population will be selected. Scientific experts will advise the council, too, Engelhorn has said.
Engelhorn will not be part of the council, which will have free rein to make decisions on how to utilize the money, her group said. The group’s members will receive $1,317 as compensation for six weekends, and meetings will be held between March and June in Salzburg, Guter Rat said.
How to tax billionaires fairly has been a contentious topic in the United States. A 2021 White House analysis concluded that the 400 wealthiest American families paid an average of 8.2 percent of their income in taxes between 2010 and 2018. “That’s a lower rate than [what] many ordinary Americans pay,” the White House said in a statement.
Kate Brady contributed to this report.
