As It Happens6:37Austrian heiress giving away $36.6M because the government won’t tax her inheritance
Marlene Engelhorn says that when she inherited her grandmother’s multimillion-dollar fortune in 2022, she “wanted to be happy about it.”
“And I couldn’t be,” the Austrian heiress told As It Happens host Nil Köksal. “I was angry instead … because I knew it was really unfair, and there was no reason for me to get this that I could really justify.”
Engelhorn has long campaigned for greater taxes on the wealthy in Austria, including an inheritance tax. But since the government won’t redistribute her wealth for her, she says she’s asking the people do it.
Englehorn is giving €25 million ($36.5 million Cdn) — which she says is the vast majority of her inheritance — to a committee of Austrian residents tasked with using it to fight wealth inequality.
“I am only wealthy because I was born in a rich family. And I think in a democratic society of the 21st century, birth should not be the one thing that determines whether or not you’re gonna get to lead a very good life,” Englehorn said.
How does it work?
To make this happen, she partnered with the Foresight Institute, a research organization.
Christoph Hofinger, Foresight’s managing director, says they’ve sent letters to 10,000 Australian residents over the age of 16, randomly selected from the country’s population register, inviting them to join what they’re calling the Guter Rat, or Good Council.
If they’re interested, they can sign up by mail, phone or online.
“We expect a few hundred returns or, due to the wide coverage of Guter Rat, perhaps even more than a thousand,” Hofinger said in an email.
He says the Foresight Institute will whittle down the registrees to a group of 50 people who are representative of the country’s demographics, including gender, age and income.
They will then meet in Salzburg over six weekends later this year and discuss how to spend the money. Participants will be paid €1,200 ($1,753.68 Cdn) per weekend, plus accommodations, travel, meals and other necessary expenses.
There are a few limits. According to the project website, they can’t keep it themselves, or give it to their friends and family. They can’t give it to organizations or people who are “unconstitutional, hostile or inhumane.” And they can’t give it to anyone who intends to use it for profit.
“Other than that, really it’s up to them to decide,” Englehorn said. “I don’t get a veto or anything. I just have to witness it as everybody else does.”
Why not create a charitable foundation?
Engelhorn’s fortune originates with her ancestor, Friedrich Engelhorn, who founded one of the world’s largest chemical companies, BASF, in 1865. Her family also owned the pharmaceutical and medical diagnostic equipment company Boehringer Mannheim, which they sold for $11 billion US in 1997, according to the New York Times.
It’s money Engelhorn says she doesn’t deserve.
“Knowing that so many people really worked their frickin’ asses off and never will see a fraction of this sum … I knew that if all of my thoughts about social justice and distributional justice were worth anything, then I would have to put my thinking into action,” she said.
Last year, Engelhorn, 31, publicly vowed to give 90 per cent of her inheritance away. She didn’t say exactly what percentage of her fortune is currently going to the Good Council, but says it constitutes the vast majority of her wealth.
She’s only keeping enough to live off for a year as she transitions to the workforce, she said. Until now, she’s primarily spent her time doing advocacy work with groups like Millionaires for Humanity and Tax Me Now.
Asked why she didn’t establish a philanthropic foundation to spend her money, Engelhorn said she doesn’t want to further institutionalize her power.
“And I don’t want other wealthy people to make decisions on my behalf either,” she said.
Ideally, she says, she’d live in a system that wouldn’t allow her to accumulate so much wealth. But Austria — like Canada — doesn’t have an inheritance tax.
Christian Stocker, general secretary of the conservative People’s Party — the senior partner in Austria’s coalition government — told the BBC it has no plans to “to further burden people in our country” with wealth or inheritance taxes.
So instead, Engelhorn says she’s doing the next best thing she can think of.
“It will be transparent, it will be public, it will be scrutinized, watched — and it will be very exciting to see what’s happening,” she said.