overtime and other labor pay. The remaining 9.25 billion reichsmarks—or 75 percent of the increased domestic revenue—were provided by businesses and high-income earners. Göring’s financial adviser Otto Donner commented: “The rapid progression in income taxes, in conjunction with the corporate tax, [ensures] a proportionally large contribution from high incomes to the needs of state.” 109 Meanwhile, price and rent increases remained strictly forbidden.
The trend toward soaking businesses and the wealthy gained furthe momentum in the fiscal year 1942–43. The disproportionately large increase in domestic tax revenues that year can be traced to the state’s imposing the so-called real estate inflation tax
(Hauszinssteuer)
. Instituted in 1926, it was designed to spread the burden of inflation to otherwise unaffected property owners. Revenues, which averaged around 850 million reichsmarks annually in the first three years of the tax, went to cover a “substantial proportion” of the costs of state-backed construction of new houses and apartment buildings during the Weimar Republic. For that reason, only already standing structures were affected by the levy, which, in keeping with its aim of public utility, was called the Construction Debt Relief Tax. 110 Revenues from the assessment were allocated directly to local authorities.
To stabilize state finances during the Depression, an emergency decree had been issued on December 8, 1931, ordering property owners to pay the questionable tax in advance. In return, the Weimar government promised that it would be lifted in the future—a promise the Nazis legally abrogated on December 1,1936. 111 The 1942 levy required property owners to pay ten years of the tax in advance in a single lump sum. Because property owners were prohibited from raising rents, they alone bore the burden. In addition, the Reich appropriated other revenues that had previously belonged to local authorities. All told the state collected the considerable sum of 8.1 billion reichsmarks (in today’s currency the equivalent of around 100 billion dollars) in additional revenue in 1942–43. The financial newspaper
Bankwirtschaft
hailed the windfall as “a satisfactory result in terms of both limiting consumer spending power and improving the state budget.” 112
The fact that those affected by the real estate inflation tax had paid 4.5 billion reichsmarks of the levy in cash temporarily throttled the circulation of hard currency. 113 Representatives of property owners’ associations agreed to the measure because the state again promised to get rid of the tax once and for all. Nevertheless, many property owners feared they would be “fleeced” by government rent controls, compulsory reserve funds, or increases in the basic real estate tax. 114 Indeed, a few months later, Economics Minister Walther Funk announced: “So-called real value assets
[Substanzwerte]
will represent an especially lucrative source of state tax revenue after the war.” And in early 1944, Reich economists began discussing new ways “to better exploit property ownership to cover state debts.” 115 Polemics against landlords continued to appear in party organs such as
Das schwarze Korps
, the official newspaper of the SS. Citing one such article from November 12,1942, the president of the higher regional court in Kassel called for “the introduction of protection, under penalty of law, for upstanding tenants against willful harassment” by landlords who had forgotten their sense of social responsibility. The situation, he added, “was crying out for resolution.” 116
The decision to call in (that is, require advance payment of) the real estate inflation tax had been preceded by a lively debate within the Nazi Party leadership on how best to extract revenues from property owners. Since the start of the war, landlords had been legally prevented from renovating their properties. Nevertheless, rents still included
The trend toward soaking businesses and the wealthy gained furthe momentum in the fiscal year 1942–43. The disproportionately large increase in domestic tax revenues that year can be traced to the state’s imposing the so-called real estate inflation tax
(Hauszinssteuer)
. Instituted in 1926, it was designed to spread the burden of inflation to otherwise unaffected property owners. Revenues, which averaged around 850 million reichsmarks annually in the first three years of the tax, went to cover a “substantial proportion” of the costs of state-backed construction of new houses and apartment buildings during the Weimar Republic. For that reason, only already standing structures were affected by the levy, which, in keeping with its aim of public utility, was called the Construction Debt Relief Tax. 110 Revenues from the assessment were allocated directly to local authorities.
To stabilize state finances during the Depression, an emergency decree had been issued on December 8, 1931, ordering property owners to pay the questionable tax in advance. In return, the Weimar government promised that it would be lifted in the future—a promise the Nazis legally abrogated on December 1,1936. 111 The 1942 levy required property owners to pay ten years of the tax in advance in a single lump sum. Because property owners were prohibited from raising rents, they alone bore the burden. In addition, the Reich appropriated other revenues that had previously belonged to local authorities. All told the state collected the considerable sum of 8.1 billion reichsmarks (in today’s currency the equivalent of around 100 billion dollars) in additional revenue in 1942–43. The financial newspaper
Bankwirtschaft
hailed the windfall as “a satisfactory result in terms of both limiting consumer spending power and improving the state budget.” 112
The fact that those affected by the real estate inflation tax had paid 4.5 billion reichsmarks of the levy in cash temporarily throttled the circulation of hard currency. 113 Representatives of property owners’ associations agreed to the measure because the state again promised to get rid of the tax once and for all. Nevertheless, many property owners feared they would be “fleeced” by government rent controls, compulsory reserve funds, or increases in the basic real estate tax. 114 Indeed, a few months later, Economics Minister Walther Funk announced: “So-called real value assets
[Substanzwerte]
will represent an especially lucrative source of state tax revenue after the war.” And in early 1944, Reich economists began discussing new ways “to better exploit property ownership to cover state debts.” 115 Polemics against landlords continued to appear in party organs such as
Das schwarze Korps
, the official newspaper of the SS. Citing one such article from November 12,1942, the president of the higher regional court in Kassel called for “the introduction of protection, under penalty of law, for upstanding tenants against willful harassment” by landlords who had forgotten their sense of social responsibility. The situation, he added, “was crying out for resolution.” 116
The decision to call in (that is, require advance payment of) the real estate inflation tax had been preceded by a lively debate within the Nazi Party leadership on how best to extract revenues from property owners. Since the start of the war, landlords had been legally prevented from renovating their properties. Nevertheless, rents still included
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