A group of 50 Austrians who represent a cross-section of the country’s population has completed its work to recommend how 31-year-old Marlene Engelhorn can redistribute a massive inheritance so that it benefits society as a whole.
The group, known as Guter Rat or Good Council, recommended that the 25 million euros ($26.8 million) should be divided among 77 organizations that are devoted to protecting the climate, improving education and health care, or supporting gender equality, among other issues. Some of the organization are large and well known, others are small and relatively unknown. They include aid groups such as Caritas, Diakonie and Volkshilfe, women’s shelters, and newspapers run by homeless people, fire departments, and pro-democracy groups. The money will be distributed over several years.
“The result is as diverse as the council itself. But what all the decisions have in common is that they want a fairer society … to support those who are discriminated against,” Good Council project manager Alexandra Wang told a news conference.
“A large part of my inherited wealth, which through my birth has elevated me to a position of power that contradicts every democratic principle, has now been redistributed in accordance with democratic values,” Engelhorn said in a written statement.
Austria has the fifth-highest density of millionaires in the European Union. The richest percent own half of the total wealth, while the poorer half of people have to make do with a total of three percent. For every 100 tax euros collected by the state, 80 come from work and consumption, with only four euros from taxes on assets.
The Guter Rat (Good Council) was put together on a representative basis from 10,000 randomly selected people. Over six weekends between March and June, the 50 people came together to receive input from scientific and field experts, and participate in professionally moderated discussions.The 50 were compensated for their work, and all costs for hotels, meals, travel to and from the conference, childcare and interpreting were covered.
Engelhorn is descended from Friedrich Engelhorn, the founder of German pharmaceuticals founder BASF. The Engelhorn family owned the German pharmaceutical company Boehringer Mannheim, which was sold in 1996/7. Inheritance tax was abolished in Austria in 2008, making it one of the few European countries that do not impose a tax on inherited family wealth.
Explaining her motivations, Marlene Engelhorn wrote:
“Democracy is about cultivating relationships: a society works on doing well. And a society is doing well when the people in that society are doing well. At the moment, this does not apply to everyone: wealth, assets and property are distributed unequally and unfairly. And so is the power in our society.
“In Austria, the richest one percent of the population hoards up to 50% of the net wealth. This means that one hundredth of society owns just under half of the wealth. And 99% of people have to make do with the other half. Almost four million households struggle to get by every day. And the one percent? Most of them have simply inherited…..
“Wealth is never an individual achievement. Wealth is always created by society. A few people get rich because they buy other people’s time and profit from it. Because they have a patent on a product that others urgently need. Because they buy a piece of land that increases in value and because society builds infrastructure around it. In the process, they destroy the environment to harvest the resources.
“But heirs give (almost) nothing of their wealth back to society. This is because they pay no taxes on their inheritances and benefit from tax privileges on their assets – while everyone else has to pay taxes on every euro they earn by working. Taxes that we use to build our public transport, schools and hospitals. Everything we share as a society, even with the wealthy.
“Inheriting is an imposition on society. Inheriting means being born directly into the boss’s armchair – but not even needing it. Inheriting means that doors open – doors which others never ever get to see in their lifetime. Inheriting means feeling financial security that protects you from unbearable work, unbearable or inadequate housing, health disadvantages and much more.
“And we the super-rich are getting richer and richer, with money moving magnetically into our vaults every day. The richest one per cent in the world is cashing in on two thirds of all wealth gains. At the same time, extreme poverty is on the rise again – for the first time in a quarter of a century, as if we had never abolished the monarchy.
“The most important question of our life is answered before it has even begun: Which family are we born into? It is up to the government to ensure that our coexistence is properly organised so that birth does not determine whether or not we have a good life. It would therefore also be their duty to ensure that all those who are able to contribute more, contribute more, and that all those who need support also receive it. It should be the purpose of all, who coexist, to work together to ensure that everyone is better off.
But in Austria there are no reasonable wealth taxes, no reasonable inheritance taxes – even though we are constantly criticised internationally for the fact that our tax system cements injustices.”
Sources:
Young heiress distributes millions to organizations that help improve Austrian society. June 20, 2024, Associated Press
Green and social groups to benefit from €25m fortune of Austrian heiress. Guardian, June 18 2024
Cover image: Kurier. Other images are from the Guter Rat website
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