Germany: A Tax Hell

PRAVDA.Ru ^ | Dec, 06 2002 | PRAVDA.Ru

[Jasonconley]

The tax burden on the population in Germany makes up 50-60%. Only very rich people manage to avoid paying taxes. All other people have to pay all of it. Inheritance taxes fall under a complicated classification. They require a payment from seven to fifty percent of an inherited sum.

[chiefqc]

I don't feel the least bit sorry for them.

Birth to death medical coverage

Short work week

Extended vacations

Very little money spent on army

Electing currupt officals

The shame of it is that the people want all this fancy stuff, and therefore you have to pay for it. Stop your whining.

[vannrox]

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Why do Russians Want to Join the European Union?

The tax burden on the population in Germany makes up 50-60%. Only very rich people manage to avoid paying taxes. All other people have to pay all of it. Inheritance taxes fall under a complicated classification. They require a payment from seven to fifty percent of an inherited sum. Yet, the law stipulates tax free minimums in case of inheritance. For instance, about 500 thousand euros are paid to a husband or wife whose spouse died, about 250 thousand euros are be paid to children, and between five and fifteen thousand euros are paid to other relatives. Calculations show that if an individual inherits 25 million euros, the state will take almost a half of it.

As is supposed, there will be another law instituted in Germany in the year 2003. According to this law, the cost of private real estate will be re-evaluated. Supposedly, the cost of taxable real estate will increase three or four times.

The government plans to retrieve the previously canceled well-being tax. This is planned “for the sake of the social justice.” Another important factor is the great financial problems that the country is experiencing at present. This issue is actively being discussed on different levels.

There is a land ownership tax in Germany as well. If a person buys a plot of land, it will be requisite to pay a non-recurring tax of 3.5% of the total cost. Then it will be necessary to pay taxes on the land in accordance with a complicated scheme. A rent payment includes the land tax as well.

It should be mentioned here that Germany uses a complicated classification for tax-payers. Any taxes or other payments to the state treasury are conducted based on that classification. The average annual income per capita in Germany makes up 30 thousand euros. Income tax, social insurance, hospital insurance, old age and medical care insurance, pension insurance, and unemployment insurance are mandatory taxes to pay.

According to experts’ estimate, there are more than fifty direct and indirect taxes in Germany. Direct taxes, which are deducted from common people’s wages in Germany, include the church tax and the solidarity tax, which was instituted by western Germans for the sake of the restoration of the former German Democratic Republic’s economy after the unification of the country. Indirect taxes include a value added tax of 16% on all kinds of industrial goods and seven percent on food, tobacco, alcohol, and salt.

As was mentioned above, only rich people in Germany can avoid tax payments. That is why the tax counselor is considered to be one of the most respectable professions in Germany. A person of this profession usually manages to find loopholes to reduce taxes with the help of gaps in tax laws. Any businessman uses a tax counselor’s services on a regular basis. Large industrial enterprises also do their best to avoid paying taxes and social allowances for their personnel. They simply move their factories to other countries. For example, Volkswagen manufactures its cars in the Czech republic (Skoda) and in Spain (SEAT).

Many well-known athletes usually state that their constant place of living is in “another country,” in which the taxes are much lower than in Germany. This is also a way to avoid tax payments. The fiscal police of Germany investigates such cases very carefully. For instance, if a German millionaire lives in Malta as in his permanent residence, he will have no problems with Germany. If the police find out that they were cheated (as with tennis stars Boris Becker and Steffi Graf), there will be criminal proceedings instituted against the “swindlers,” as it is stipulated by the law.

An “average” German citizen resorts to the help of counselors that work for state financial and tax departments. Sometimes. people go to public associations of tax-payers. At times, it is possible to reduce a tax burden by means of “spending” money on medical care or education for children, acquiring equipment for professional activity, and the like.




.A VERY timely and mentionable and postable article. Bump. BTTT, and Ping to all you who are interested in individual self certainty.

[unixfox]

Germany: U.S.A. A Tax Hell

[PatrioticAmerican]

" Only very rich people manage to avoid paying taxes. All other people have to pay all of it. Inheritance taxes fall under a complicated classification. They require a payment from seven to fifty percent of an inherited summ."

Ummm....do the rich NOT have money to leave when they die? The above statement sounds like a commie ploy to blam the rich for everything. The usual stupid commie statement. On one hand the rich pay nothing, and on the other they pay 50-70% just in inheritance.

[jjm2111]

Quite right, we pay like a total effective tax rate of like 50%.

[Jasonconley]

I think he is saying that the rich are able to get out of paying.

[pepsionice]

Having lived in Germany for four years now...and making $60k a year...I can tell you that you that by the time they take in all their taxes...including the TV tax ($180), the gas tax ($3 for each gallon), the sales tax (16 percent), the water-run off tax, the dog tax, the vehicle tax ($250 min for each vehicle), and the personal income tax of 28 percent (it goes higher if your pay goes higher)....there is not a lot left at the end of the month. I can attest to that fact. A full tank of gas each 9 days runs about $50. They just raised the flower tax...it used to be 6 percent and now its 14 percent. As for tax credits...they really don't believe in IRAs....but they do allow extreme risk investments (new business ventures, wind energy, etc) to count towards credit but there is a limit.

As for the rich...they have discovered that you simply peel off funds and take the cash or income out of the country. For example...I knew of a person that worked on Saturdays performing roof repairs...and took the $12k per year that he got off these small jobs over across the border to a Lux bank...deposited it quietly there. There is no tax on that income and they cannot figure this out. I have been told that Doctors work the same kind of deals with a little practice in their house basement for their special patients. The patient slips them some cash and the doctor quietly sends the money off each month. You see a lot of folks around age 50 just packing up and going off to Spain...buying houses with cash....and you know that this money did not come from their German bank account.

This is the way you make the system work....and why they are missing billions of Euros...everyone is screwing the system. They all disagree on the tax system and avoid messing with it.

[Taxman]

The US is not too far from Germany in this regard.

If We the People do not get off our duffs and demand fundamental tax reform, we soon will be as over-taxed and over-ruled as the Europeans are.

[gd124]

Like with everything, the poor and the very rich get out of paying while the middle class is slugged with the tax burden.

[PatrioticAmerican]

I am the so-called "rich". I pay more in taxes than 50+% of people earn in a year. Believe it or not, there is very little that the "rich" can get away with paying. We pay, in Colorado, a combined state and federal 42% of anything we can’t tax shelter, and, frankly, there is extremely little to be sheltered.

Certainly I can deduct business expenses or have the company provide expensive entertainment, but my personal purchases are all taxed at 42%, minus about $20K that I can deduct anymore. My homes, cars, planes, boats, motorcycles, clothes, furniture, meals, education, etc., are all taxed at 42% and there isn't squat I can do about it. There is little that I can deduct to keep from paying 42% on.

If I want a condo in Vail I can let the company buy it and make it an investment, but I can't have exclusive use of it or else it is deemed a personal purchase and taxed. MOST property is purchased and taxed up front, and then used as an investment. Most. The rich don't forgo paying the income tax on the money to buy the property.

Seriously rich, $50+ million, have already paid 42% income tax, which means they have paid $45+ million in tax. Have you? I have already paid more in taxes than many people earn in a lifetime, but I certainly don't receive anything more than they do, but I have paid 100 times more for it.

[gd124]

The very rich can afford offshore bank accounts, legal tax avoidance schemes and the best accountants. The middle class, especially the upper middle class falls into a niche of being judged rich enough to pay exorbitant rates of tax and not to get any benefits that would be given to people earning less, but not being able to afford means of reducing their tax burden.

Please don't interpret this as meaning that I want higher taxes for the rich. I want lower taxes across the board.

[PatrioticAmerican]

Even so, the very rich cannot earn money in the US and not pay taxes. Besides, for those very rich that actually make money but live here, they spend here, and that creates far more wealth for the rest of us than if they paid that money in taxes.

About the only real tax advantage the rich have is corporations. They can own one and allow the corp to spend the money on them, but, the result is that they do not own what was spent.

Remember the golden rule about taxes: The rich may pay most of the taxes, but they collect it from everyone else. Raise taxes and the rich raise the price of their products to compensate. It really is the middle and lower class that get it in the shorts in the long run.