The Reich Flight Tax () was a German capital control law implemented in 1931 to stem capital flight from the German Reich. After seizing power, the Nazis used the law to prevent emigrants from moving money out of the country.
The law was created through decree on 8 December 1931 by Reichspräsident Paul von Hindenburg. The Reich Flight Tax was assessed upon departure from the individual's German domicile, provided that the individual had assets exceeding or had a yearly income over . The tax rate was initially set at 25 percent. In 1931, the Reichsmark was fixed at an exchange rate of per dollar, making equal to US$47,600 ().
In Nazi Germany, the use of the Reich Flight Tax shifted away from dissuading wealthy citizens from moving overseas and was instead used as a form of "legalized theft" to confiscate Jewish assets. The departure of Jewish citizens was desired and permitted by the Nazi governmenteven after the Invasion of Polanduntil a decree from Heinrich Himmler forbade Jewish emigration on 23 October 1941. The tax was steadily increased and used as a "partial expropriation" to seize the assets of Jewish refugees who were persecuted and driven to flee their homeland.
Historical background
The Great Depression of 1929 led to massive loan cancellations from the international banking system; this particularly affected Germany, which had an estimated foreign debt of in 1931, of which alone had to be repaid in the first half of the year. The German government limited free capital flows and controlled the exchange of foreign currency, while also implementing austerity measures and raising the income tax. These measures precipitated a wave of capital flight, and the Reich Flight Tax was intended to dissuade wealthy would-be emigrants from leaving the country.
The idea that penalizing "unpatriotic desertion" (relocation overseas to avoid taxation) was not new. In 1918, the German government had passed the "Law against tax evasion" (, Reichsgesetzblatt I, p. 951) which was repealed in 1925.
Because of the increasingly precarious and dysfunctional parliamentary government in the final years of the Weimar Republic, a series of emergency decrees were issued in lieu of normal legislating through parliamentary procedure.
Decree of 8 December 1931
The Reich Flight Tax was one of many other measures implemented by the "Fourth Decree of the Reich President on the Protection of the Economy and Finance and on the Defense of Civil Peace" (, published in the Reichsgesetzblatt 1931 I, pp. 699–745.): there were also regulations on prices, interest rates, the housing industry, social insurance, labor law, and financial rules, as well as gun control regulations and the forbidding of uniformed bodies.
As a temporary "Measure Against Capital Flight and Tax Evasion", individuals who were citizens of Germany as of 31 March 1929 and had moved or would move their residence abroad before 31 December 1932, the tax would be assessed, provided the emigrant had taxable assets in excess of or an annual income over . The tax rate was set at 25% of total assets or income and was also applied retroactively.
Taxable persons who attempted to evade this penalty could be punished with no less than three months imprisonment and an unlimited fine. The names of those abroad who evaded this penalty were listed in a "Tax wanted poster" published in the Deutscher Reichsanzeiger, and were to be arrested in the event of a visit to Germany. Any assets in Germany belonging to tax evaders who had moved overseas were seized.
The law was supposed to expire at the end of the year 1932 but that year it was extended to 31 December 1934 (Reichsgesetzblatt I, p. 572).
Nazi Germany
The existing decree assessing the tax was substantially changed with the "Law Concerning Revision of the Specifications of the Reich Flight Tax" (), issued 18 May 1934 (RGBl. 1934 I, pp. 392–393), and was extended six times before being amended on 9 December 1942 (RGBl. I, p. 682) to remain in force indefinitely.
A major change included in the 1934 revisions was the lower limit for taxable assets was decreased from to (). The assessment means were also changed to the detriment of the would-be emigrant. As such, a much larger group of people were targeted by the tax. The tax, which was originally aimed at those who voluntarily sought to reduce their tax burden by moving overseas, instead affected primarily the Jews who wished to leave their homeland due to well-justified fears of violence, incarceration, and occupational limitations.