Which country taxes its citizens the most?
taxes and finances
Constanze Hacke works in Cologne as a business journalist, lecturer and presenter for radio, print media, specialist publishers, public clients and companies. For more than a decade it has been under the motto "Economy - made easy!" successfully self-employed and has made a name for herself as an expert, especially in the tax field. Her work also focuses on the areas of law, finance, economic policy, medium-sized businesses and management. As a specialist journalist, she sees her task as being to understand and explain complex relationships and dry topics, and to make them understandable and vivid. At the end of 2011 her book "Self-employed and then? How freelancers become successful in the long term" was published by Wiley-VCH Verlag. In spring 2013 the guide "Taxes made easy. First aid for the self-employed" will be published by the same publisher.
introductionTaxes are there for everyone. And everyone pays taxes, sometimes without even realizing it. If you drink a cappuccino in a café, you will only see the VAT on the bill later. The coffee tax, which is included in the price, goes unnoticed from the coffee drinker's wallet to the treasury's till. For a full tank of petrol, for example, the state collects not only the omnipresent value-added tax on every liter from the pump, but also energy tax - and with every pack of cigarettes, in addition to sales tax, tobacco tax. But what do we get for these tax payments? And why do we have to pay taxes at all?
Taxes are the basis of a political system; they provide the state with money so that it can carry out its tasks. So taxes are above all one thing: revenue for the state. This income finances the services that we expect from a community: education, public infrastructure, health care, social security or internal and external security are among these areas. Schools, streets, hospitals and kindergartens have to be paid for, as do environmental protection tasks, the courts or the police. Taxes are also used to guide behavior or to redistribute money with a view to social justice. The tobacco tax is an example of the state trying to curb smoking through high taxes. And with the linear progressive income tax rate, the state wants people with a high income to pay more taxes than people with little money.
Taxes are therefore levies that all citizens have to pay. Of course, the federal, state and local governments can also incur debts and take out loans. But the main source of income for the state is taxes, without which it would not be able to shape the community. In 2011, tax revenues amounted to around 527.3 billion euros.
What are taxes actually?In the law, which is the basis for all taxes in Germany - in the so-called tax code (AO) - it is precisely defined what taxes are: “Taxes are cash payments that do not represent a consideration for a special service and are provided by public law Commonwealth is imposed on everyone to generate income for whom the facts apply to which the law attaches the obligation to perform; generating income can be a secondary purpose. ”(Section 3 (1) AO).
In other words: taxes are compulsory levies that the federal, state and local governments can impose on citizens. Taxes can also - at least nowadays - only be raised in euros and cents; a farmer can therefore not meet his tax liability with a hundredweight of wheat. In addition, you pay taxes without being able to claim a service in return for the money. So whoever pays the gasoline bill at the cash register of the motorway filling station and thus pays the energy tax at the same time, cannot in return demand that the potholes on the road be repaired. Conversely, the following applies: Citizens cannot refuse to pay taxes because they do not agree with a certain state expense - for example, for the expansion of a motorway near a nature reserve.
Taxes must also not be earmarked: each tax euro flows into the total amount of the household, regardless of the type of tax, from which all expenses are financed. Because all income in the budget must be used to finance all expenses. So there is no separate road construction budget that is fed exclusively from the revenue from the vehicle tax. And assume that the income from the vehicle tax is actually used exclusively for road construction: If the vehicle tax income then increased, more roads would have to be built just to get rid of the "excess" money. Conversely, those who do not have to pay taxes - as it is called in official German - do not fulfill a certain “offense”. That means: if you don't own a car, you don't have to pay any road tax.
Very important, even if it is not expressly stated in the law: Taxes must not be levied arbitrarily. The fact that decisions are not made at will, of course, applies not only to tax policy, but also to the democratic constitutional state in general: the separation of powers between parliament, government and the independent judiciary protects the population from the state abusing its power. Discriminatory treatment, as in the time of National Socialism, for example through the “Reich flight tax” for Jewish citizens, is now ruled out.
Who decides on taxes?Germany is a federal state; The Basic Law assigns certain tasks to the federal, state and municipalities: foreign policy or the armed forces are, for example, federal matters, the states have to take care of the police, schools and universities, the municipalities, for example, about kindergartens or garbage collection. Both the federal government, the federal states and the municipalities need money for these tasks. Therefore, not all taxes simply flow into a single national budget.
The financial constitution, i.e. all rules and regulations that affect public finance, are laid down in Articles 104a to 108 of the Basic Law. It is specified here
- how the expenditure burdens are distributed,
- who makes the tax laws,
- who receives which tax revenue,
- how the financial relations between the federal levels are structured and
- what are the responsibilities of the administration and the judiciary in relation to taxes
In addition to the exclusive legislative competence, there is also competing legislative competence between the federal government and the federal states: The federal government always has priority when it is entitled to the tax revenue in whole or in part or when there is a need for a federal law for other reasons. The states can enact tax laws if the federal government does not make use of its legislative right. In addition, the federal states participate in all laws passed by the Bundestag - with different consequences: In the case of the so-called objection laws, the Bundesrat can object to the law submitted. However, Parliament can reject this objection. It is different with the consent laws. The regional chamber must expressly agree to this. If it doesn't, the law has failed for the time being; an agreement is then only possible through the mediation committee.
(1) The Federation has exclusive legislation on customs duties and financial monopolies.
(2) The Federation has competing legislation on other taxes if it is entitled to the revenue from these taxes in whole or in part or if the requirements of Article 72 (2) are met.
(2a) The states have the power to legislate on local consumption and expense taxes as long as and to the extent that they are not similar to taxes regulated by federal law. You have the authority to determine the tax rate for real estate transfer tax.
(3) Federal laws on taxes, the revenue of which flows in whole or in part to the federal states or the municipalities (municipal associations), require the approval of the Bundesrat.
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