When Do Leftist Parties Put Taxing the Rich on the Agenda? Lessons from the 2021 Federal Election in Germany

Abstract

Despite an increasing concentration of income and wealth, most democracies refrain from taxing the rich more heavily. This article uses Germany as a case to examine the reasons for this reluctance, as well as conditions under which taxing the rich does appear on the political agenda. An analysis of campaigns since 2005 shows that the Social Democratic Party (SPD) has only reluctantly championed tax increases during this period. Interviews with political actors reveal the main reasons to be a feared countermobilization by business interests, hostile public opinion, and a lack of tax expertise in left-wing parties. The 2021 election campaign deviated from this pattern because the SPD made taxing the rich a priority. This deviation can be explained by the interplay of an unusual taxation focus of the party leadership, the salience of investment needs, and a programmatic weakness of the Christian Democratic Union/Christian Social Union and Free Democratic Party with regard to financing these needs. Particularly with a fiscally moderate candidate, the SPD was able to champion taxing the rich without compromising economic competence ratings. In a second step, the article describes survey experiments and focus groups involving low-educated citizens that were used to investigate whether the tax campaign contributed to the SPD’s electoral success. This did not seem to be the case. Overall, assumptions about public opinion voiced by political elites in our interviews were confirmed: Proposed tax increases were met with disinterest, uncertainty about their effects, negative connotations, and worries about harm to the economy. Taxes for the rich were also frequently rejected based on meritocratic legitimization of wealth.