Taxing the Rich

The Rich Speak, Sept. 25

by Christine Imlinger, Helene Sorgner, and Jakob Zirm   

Master of the Woods: Esterházy-nephew Stefan Ottrubay can imagine paying a wealth tax, but only under certain conditions.. 

"Stefan Ottrubay manages one of Austria’s biggest fortunes. As the nephew of Melinda Esterházy, he belongs to the family that owns 110,000 acres of land (including large parts of the Neusiedlersee) of which about half is in commercial use.

"[Ottrubay thinks a 'rich persons' tax' (Reichensteuer)] 'is the wrong term.' Instead, the debate should be about the efficiency of the tax system, and its progressiveness. [...] 'I can imagine a wealth tax in the future very well,' says Ottrubay. […] Of course well-off individuals have an obligation to contribute to society, but "as entrepreneurs they contribute a great deal anyway; that is why there must be a distinction between active and passive wealth.' After all, one needs private wealth to make investments.

If the state wants more money, it must first show that it can use its available means better. Especially in the regions and regarding investment assets Ottrubay sees reserves lying idle.

He wishes that wealth were viewed more positively in Austria, as in the Anglo-Saxon region. 'If there is a hate campaign against 'the rich', they will think to themselves: Why should I contribute to this society?'"

The rich homebuilder with noble ideas: Hans Peter Haselsteiner is a construction entrepreneur and former politician [for the Liberal Forum, ed.] - and a tax rebel disdained by the well-to-do.

"In a sense, he is Austria's Warren Buffett: a rich citizen, who demands that he and his kin pay more taxes. The CEO of Strabag Hans Peter Haselsteiner hardly made friends among high earners when he demanded three years ago that the top income tax rate be raised to 80%. [...]

[Despite his sympathies for the SPÖ] he dislikes the current discussion about a rich persons' tax that the party initiated. [...] 'It's a crack-down on tax payers to compensate for their own failures. It is shameful and irresponsible of the politicians to leave opportunities for savings unrealised because they are protecting their own clientele and want to be re-elected." For instance, proposals to reform the federal state system have been known for years and are necessary.

But: 'Once politicians have made proper savings, then it is important that the tax distribution is perceived as fair. And that isn't currently the case.' [...]

The rich could increase their contributions through a greater taxation of revenues from land or capital. "I don't think much of a property tax [Substanzbesteuerung] because that makes sustaining a fortune difficult. But when the cash register goes ka-ching, then taxes should be paid.' Haselsteiner also advocates the re-introduction of an inheritance and gift tax.

'Voluntary contributions instead of taxes? That I reject. That's just like regularly going to a restaurant in a group of ten. When the bill comes, three people always happen to be on the toilet, and four are reading the newspaper, while the same three always end up paying.'"

See also Georg Herrnstadt's "Expropriation? Why Certainly!" in TVR Oct 2011.