If the government fails, we have to fix things ourselves. Wealth is unequally distributed in Austria - and so is power. One percent 1 of the people own half of the total net wealth. 99 percent of the people have to share the other half. That is almost four million households.
This gap is widening year after year. In Austria, every euro earned through work is taxed - but wealth and inheritances are hardly taxed, if at all. We are talking here about dynasties that accumulate money and power over generations, but prefer to avoid taxes and keep them as low as possible - in other words, their contribution to society. But without this society, there would be no such wealth: wealth is never created in a vacuum, but always in exchange with others.
Marlene Engelhorn also comes from a dynasty. But she has been fighting for years to ensure that the wealthy like her are taxed fairly. That they also do their bit. It would actually be the job of the government to act and levy taxes on wealth and inheritances. And they would have the population behind them: more than two thirds of the people in Austria, across all social classes, are in favour of taxes on wealth. But the government is failing. Marlene Engelhorn is not only rich, she is also part of this large majority who would like to see a different distribution of wealth.
Marlene Engelhorn has therefore placed her assets - and her trust - in the hands of 50 randomly selected people. The "Good Council" developed ideas for dealing with the distribution of assets and decided on the redistribution of 25 million euros.
50 people were selected for Guter Rat (Good Council). In such a way that they reflect Austria's population as well as possible: Gender, origin, income and so on.
These 50 people met over six weekends and received input from experts on topics such as wealth distribution and its impact on politics and society in Austria.
The Good Council has developed ideas for dealing with the distribution of assets and decided what should happen with the 25 million euros so that these ideas can be implemented.
Facts on wealth distribution
Austria has the fifth-highest density of millionaires in the EU. The richest percent2 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. And only four euros from taxes on assets 4.
In the next 30 years, over 600 billion euros will be inherited in Austria 6 (and this is probably a far too conservative estimate). Tax-free, because inheritance tax was abolished in 2008. Almost half of these inheritances will end up in the richest tenth of households 7.
1Kennickell, A. B., Lindner, P. & Schürz, M. (2021). A new instrument to measure wealth inequality: distributional wealth accounts. Monetary Policy and the Economy, Q4/21, page 72, Table 1, "Net wealth simulations performed to align HFCS and NA aggregates - overview" (https://www.oenb.at/dam/jcr:37664c81-2d0d-409e-8d33-a19fc2b25854/05_mop_q4_21_A-new-instrument-to-measure-wealth-inequality.pdf)
2Ruttmann, R., Minihan, M., Sharifi, Z. & Mojsa, S. (2023). Wealth Report Europe: An overview of European wealth in 2022 and beyond. Zurich, Redesigning Financial Services, page 30, Fig. 10: "More Millionaires in Core Countries"(https://redesigning-fs.com/wp-content/uploads/2023/04/RFS-Wealth-Report-Europe-2022.pdf)
3OECD (2023). Tax revenue: Taxes on property. Revenue Statistics - OECD countries: Comparative tables.(https://stats.oecd.org/Index.aspx?DataSetCode=REV)
4"Steuern und Sozialbeiträge in Österreich: Einzelsteuerliste" der Statistik Austria(https://www.statistik.at/fileadmin/pages/232/Einzelsteuerliste1995bis2022_SR2023.ods);(https://www.statistik.at/statistiken/volkswirtschaft-und-oeffentliche-finanzen/oeffentliche-finanzen/oeffentliche-finanzen/steuereinnahmen)
5,6Altzinger, W. & Humer, S. (2013). Simulation of the revenue of various inheritance taxes. Discussion Paper. Vienna University of Economics and Business.
7Household FInance and Consumption Survey (HFCS) 2021: https://www.hfcs.at/ergebnisse-tabellen/hfcs-2021.html
Redistribution means ...
... recognizing that wealth is always created by society - never by itself. Therefore, some of it should be redistributed to society in order to improve the lives of all.
... not just alleviating the symptoms of social ills, but tackling the causes. In other words, to also support the groups and movements that are fighting against the causes of social inequality.
... listening to those who are most affected by social and environmental problems. They have a greater insight into these problems ... and therefore can offer possible solutions. And to give them confidence and authority in decision making.
... not just talking about money, but also time, knowledge, skills and contacts. For example, investing time in voluntary work; opening up networks and spaces that otherwise only wealthy people have access to.
... being open to multi-year commitments, to promoting the basics instead of prestige projects and to jointly planning which amounts in which intervals would really help.
