Uli Hoeness, boss of the German soccer champion Bayern Munich, turned out to be a tax dodger: He filed an amended tax return admitting that he avoided paying taxes by means of a Swiss bank account. Uli Hoeness, who enjoyed a reputation to be a moral and honest man, will face prosecution in a tax avoidance case and he will be punished for his wrongdoing. But the debate that has now arised in German politics and media is just hypocritical.
We all avoid paying taxes where ever possible. That doesn’t mean that everybody has a bank account in Switzerland or in an offshore tax haven. But most people make use of legal tricks in there tax declarations in order to pay as little tax as possible. Books like “1000 ganz legale Steuertricks” (1000 all legal tax tricks) by Franz Konz rank high in bestseller lists. But the line between legal and illegal tax tricks can be quite thin.
The German tax system is very complex and there are many things that you can apply for deductions for. At the same time taxes are very high compared to other countries. For high incomes, the authorities impose a tax of 47.5%. It is quite understandable that some people try to avoid such high payments.
The only way out is a new system of taxation: It needs to become easier – and tax rates need to be a lot lower. Lower tax rates don’t mean less tax revenues for the government – they may even lead to higher tax revenues, because economic growth is fueled and rich people will quit hiding their money from the authorities. We need a tax cut – this should be the consequence arising out of the Hoeness case.