Saturday, October 10, 2015

Taxes Going Up

Focus, the German news magazine, put up an interesting but short article this morning over debt owed by cities throughout Germany.  All together.....they amount to a debt point of roughly 140-billion Euro (160 billion dollars).  That's strictly cities alone.

Across the whole spectrum.....there's trouble brewing and the only way raising taxes.  Because income taxes and sales taxes are a federal thing and the cities can't get into the middle of those taxes.....they have to find the minor taxes which they can affect.

Like the dog tax for example.  Focus gave the example of a town in Saxony-Anhalt which has raised their dog tax to 50 Euro a year per dog (a hefty twenty-five-percent raise over last year).  The necessity for a dog tax?  Authorities will say that dogs leave poop on the streets and that the cities manage a street and sidewalk cleaning crew for such things.  Most folks walk their dogs and clean up the poop it's questionable if any of the 50 Euro gets spent in that way.  If you figure a town of 10,000 residents and they probably have 5,000 dogs....that's 250,000 Euro a year.....a fairly robust amount of money for a small town.

Garbage fees?  Well, that's another item where a city can raise and toss some of the money into the general pot for spending.

Property taxes are another area where a town can establish general funds.  Unlike the US amounts of a couple thousand.....most people in Germany typically pay around 300 to 600 Euro a year for their property.  Focus gave one example of Siegburg where the city authorities decided to up property taxes by seventy-two percent in one single year.  Naturally, that got people very disturbed and frustrated.  The chief reason for the high rise?  The forty-thousand residents of Siegburg have one of the highest debt ratio situations of any city in Germany.  It amounts to roughly nine to ten thousand Euro a resident.  The cause? No one seems to ever want to dig into the spending habits....which might go back twenty or thirty years.

The last area that a city can go after more cash is waste-water taxes....where the amount is usually figured on a cubic-meter scale.  The more property or roofing on your house.....the higher the tax.

What Germans will typically say is that they all want to live in a marvelous and remarkable town.  They'd like to have cobblestone streets, large city parks, traffic circles, modern designed playgrounds for kids, a cool sports park, a fest or two per year, a statue program (at least one new one every three years), fine landscaping with a professional touch, and a superb railway/bus point in town.  Well.....all of this costs money.

In my local region....there was a town that got into a paving project and they didn't really talk about the cost factor.  The public wanted their streets repaved (it'd been thirty years since the last project).  The initial deal was that the city would pay X, and that each resident would have to come up with Y (figure in the range of 500 to 800 Euro).  These folks were willing to accept a deal like that because the new paved structure would improve property values.  Well, when they finished the project....the mayor handed out the actual bills....which jumped to the 10,000 to 15,000 Euro level.....which they'd allow you to pay several hundred Euro a month until you reached your pay-off point.  Naturally, it's after the paving....and folks got extremely upset with the city council over the handling of this and the bill amount.

So when you hear a German talk excessively about local taxes.....that's the point of his discussion.  He'd like a lot of stuff for his local town, and he really doesn't grasp the cost factor of his expectations.

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