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In December 2014, the German Federal Constitutional Court declared the Inheritance and Gift Tax Act unconstitutional. The following article presents and discusses the judgment. Instead of trying to comply by changing as little as possible, the legislator should consider a fundamental and consequent alternative: an inheritance and gift tax that treats everybody the same.

The German Basic Law envisions a role for both citizen and state in fostering the common welfare. Trust in individual freedom is the starting point for achieving this goal. But individual contributions to the public welfare usually entail individual financial responsibility as well. Only in certain exceptional cases does the law provide for financial compensation. These exceptions are to be found in public interest law, in the law on subsidies and in the law on state liability. The exceptional character of compensatory regulations is rooted in the dichotomy between state and society. According to this dichotomy, legal constraints on private freedom generally only serve to circumscribe individual spheres of liberty. The dichotomy between state and society, however, is becoming increasingly vague. More and more often, citizens are legally obligated to actively support public purposes. In addition, the law increasingly allocates financial responsibility for promoting the common welfare to individual...