Quarter Life Crisis

The world according to Sven-S. Porst

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Tax fools

582 words

Germany is said to have the most complex tax laws in the world. Which doesn’t mean that things are better balanced than elsewhere but primarily that there are plenty of ways for people to ‘evade’ taxes in a perfectly legal way by finding little holes in the laws which entitle them to not pay taxes for their income. It also means that we have plenty of well-earning tax consultants running around who don’t just take over bookkeeping duties for people and businesses – which I guess is a perfectly honourable job – but also actively support them in finding those loopholes or in ‘creatively’ presenting their expenses – which is a bit sickening.

Apparently tax laws are so complex that even those tax consultants aren’t experts in all areas. From time to time you hear people say that it might be a good idea to simply scrap most of the tax laws and replace them by a flat but lower tax. Of course that’s just never going to happen because it not only would remove all those nice exceptions lobbyists have worked for decade after decade, both tax office employees and tax consultants would probably dislike the idea as well because they might lose their comfortable jobs.

What’s downright scary about the whole taxing thing is how politicians can even dare making tax laws as there seems to be no way to reliably predict the outcome of any change. The same would be true for scrapping tax laws, I suppose. People working in the area seems to operate mostly on ‘experience’ with little solid knowledge. Incompetence seems to play a role as well.

A rather embarrassing example of that was presented to me by my gym. At the beginning of 2007 the VAT rate was increased a little. And around the time they sent us a letter that their tax consultants – I think PWC it was, i.e. a big name big price company – advised them to change the contract details to enable them to pay the lower tax rate for as long as possible. Back then I already wondered: If they waste so much of their (i.e. my) money on hiring these people why didn’t they think about it to begin with? It’s not that VAT rate increases are an entirely unprecedented or unexpected thing. Surely you’d expect such highly payed ‘professionals’ to have these things in mind when working out the endless details of the contracts. If not, what exactly are they doing?

Another thing that struck me as odd at the time was that it seemed to happen at the very last minute. It’s not that German politics or bureaucrats operate at lightning speed. Such tax increases don’t happen as a surprise and they surely knew about it for months – even at the time I signed the contract to begin with. Yet, that change came through pretty much at the same time as the change of tax rate.

But that isn’t the whole story. To finish up the highly-payed moronicity, it came out now – more than a year later – that they couldn’t change this aspect of the contract without getting an extra signature and we were asked to supply that. Please! WTF is that supposed to mean? Couldn’t these ‘experts’ just figure that detail out right away? Shouldn’t they perhaps consider hiring tax consultants who can, uh, read and do their job? It really pains me to be supporting those people in any way.

April 1, 2008, 1:02

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