Home Business Marlene inherits millions. She wants the IRS to take it away.

Marlene inherits millions. She wants the IRS to take it away.

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The Engelhorn family’s multibillion-dollar fortune comes from Friedrich Engelhorn, who founded BASF, one of the world’s largest chemical companies, in Germany about 150 years ago. Another family-owned company, Boehringer Mannheim, which made pharmaceuticals and medical diagnostic equipment, was sold to Roche for $11 billion in 1997.

“There is no need for another foundation. What is really needed is structural change.”

Marlene Engelhorn

As a partial heir to this fortune, Engelhorn grew up in a mansion in a posh part of Vienna. She attended French-speaking schools, describing herself as a student who “corrected grammar mistakes when I heard them”. She played soccer with the boys and read voraciously. She said she lacks an awareness of class privilege.

When she saw friends living in small apartments, she wondered why they didn’t choose to live in a big house with a garden, which was “much nicer”.

“Privilege really gives you a very, very narrow view of the world,” she said.

At the University of Vienna, Engelhorn’s horizons began to expand.

She volunteered with gay rights groups and became interested in the relationship between racial, gender, and economic discrimination.

“just go play”

In early 2020, as Engelhorn sat in a café in Switzerland, where she had gone to visit her grandmother for her 93rd birthday, an accountant told her that she would inherit many millions of euros after her grandmother’s death.

He told her to enjoy herself. “He said, ‘It just needs to be spent,'” Engelhorn recalled. “Like, ‘Just go play.'”

But for her, this news was more embarrassing than a reason for joy, it prompted painful reflections on her place in society.

“I was part of the problem,” she said she remembers thinking. “I’m wide awake and all, but now: What am I supposed to do with all these beautiful thoughts?”

While she was looking for advice, she entered the orbit of millionaire tax advocacy groups, whose members meet in person or by video call to discuss their benefits — and how to get the state to take them away.

Engelhorn at an activist event in Amsterdam. The inflatable next to her should represent the “elephant in the room” of tax fairness. credit:New York Times

Some members call the groups, which include Resource Generation and Patriotic Millionaires, a “safe space” where they can tell what they call a “money story”—an honest account of the true origins of their social status. They recognize that crime is often at the heart of their family’s well-being, and examine the sexist and racist components that may have contributed to this.

Perhaps most importantly, participants must articulate how they participate in what they commonly refer to as “giving back” to society.

Some of these groups have emerged in the last 20 years or so, but their membership has expanded recently, driven by what Engelhorn calls the “next generation of wealth,” whose approach differs from many parents. Instead of trying to give away some of their inheritance, they now ask how it is possible that they received so much inheritance from the beginning.

“Rich Kids’ Clubs”

Newspapers scoffed some of the language of these groups, calling it pretentious and self-righteous, and Engelhorn complained that some disdainful press derided them as “rich kids’ clubs”.

She believes that these groups have helped her understand what can be done differently with the redistribution of wealth. If she hadn’t confronted them, she said, “I might just accept the status quo.”

Which is easy to do, she noted, “when you can literally afford not to care.”

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After joining several of these groups, Engelhorn last year co-founded another for Central Europe, Tax Me Now, described on its website as “an initiative of wealthy individuals who are actively committed to tax justice.”

Her political goal is to introduce or increase inheritance and wealth taxes (Austria, where Engelhorn lives, abolished inheritance tax in 2008).

The number of countries in the Organization for Economic Co-operation and Development that tax net wealth has fallen from 12 in 1990 to five in 2020. While more OECD countries tax inheritance, the amount collected is 0.5 percent of all taxes there.

For Engelhorn, the tax laws mean that it’s not just huge amounts of wealth that are passed down; it is also dynastically distributed power. According to her, wealth taxation would serve a dual purpose: to increase state resources and to deprive people of political influence who did not earn it democratically.

“I don’t think I should be in power or rule the way I could be if I used my wealth appropriately,” she said.

“I don’t think I should be in power or rule as I might be if I used my wealth accordingly.”

Marlene Engelhorn

After the performance in Amsterdam, Engelhorn was awarded for her active activities.

“Of all the rich people” who spoke at the event, Engelhorn was the one who spoke about taxation with the most passion and honesty, according to Jafar Shalchi, founder of Millionaires for Humanity. “She’s No. 1 to me,” he said.

Whatever Engelhorn’s speaking ability, she helped spark interest in the issues of wealth and inheritance taxes. She recently published her first book, Geld, or Money, about the redistribution of wealth. And since she first publicly announced her desire to tax her inheritance, she has attracted the attention of the German-language media.

This isn’t the first time a member of the Engelhorn family has made headlines with tax issues. When her cousin and archeology donor Kurt Engelhorn sold Boehringer Mannheim, the German tax authorities did not collect the money because he had previously moved the company’s legal seat abroad.

“Tax Justice”

Marlene Engelhorn’s repeated appearances on radio and television led to dozens of people asking her for financial help. She said she hates to say no, but she doesn’t think she should decide who gets her money.

“I would like Tax Justice to take this impossible decision off my hands,” she said.

She has committed to giving away at least 90 percent of her inheritance and wants it to go to the state — but only in the form of a tax, not a donation. “A government that doesn’t use wealth taxes isn’t going to get a gift just like that,” she said.

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Not all millionaires share her passion for wealth taxation.

Ansgar John Breninkmeier, an heir to a fashion fortune, interrupted Engelhorn while she was on stage in Amsterdam to angrily ask her if she knew what the Netherlands’ wealth tax was.

“We have a wealth tax,” he said. “It’s 1.6 percent,” he added, referring to the Dutch tax on the value of a person’s savings and investments.

It was a ridiculously low number for Engelhorn.

But later in the day, she said it’s not up to people like Breninkmeier — or herself — to say what’s a fair bet.

“This is not the place for rich kids to say,” she said, “what the tax should be.”

This article originally appeared in The New York Times.

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