Overview

• The DIW proposal outlines two levy variants: one on all statutory, occupational and private pensions and a second that also taxes capital income in households with members over 65
• Retirement incomes above a €1,000 exemption would incur a 10 percent surcharge that could cut high earners’ monthly net pensions by about 4 percent and increase low pensions by as much as 11 percent
• Revenue would be recycled exclusively within the retired generation to ease demographic strains on the pay-as-you-go system without raising burdens on younger workers
• Support comes from Monika Schnitzer and the Bund der Steuerzahler for addressing baby-boomer costs but faces rejection from CDU’s Gitta Connemann over planning certainty and from DGB’s Anja Piel for redistributing existing poverty
• The proposal awaits formal recommendations from a cross-party pension commission and has drawn warnings that birth-date requirements for capital gains taxation could erode retiree privacy and discourage late-career employment