Tax Story

 It was a short humorous piece on N-24 (German commercial news) this morning, with a comment by the German Finance Minister (Scholz, SPD).

Scholz basically accused rich Germans of being non-compliant or not agreeable to solidarity.  He's basically suggesting they are avoiding taxation.  

The twist of this....because of the enormous amount of debt that the German government has taken on in recent months....because of Covid-19, there's a serious shortfall.  To make up for this...you can readily assume that various taxes will be laid out and generally only affect rich Germans (at least it's always told that way via journalists).

So, you have to ask the stupid question....are the industrious folks or wealthy Germans actually avoiding taxes?  Here, you don't have a concrete answer.

If you walk around hotel owners....most will say they've eaten up savings to keep their hotel operations afloat and not gone to bankruptcy yet.

If yo walk around restaurant owners...most will say they've eaten up savings to keep their operations afloat.

Car companies?  Sales for most of 2020 were flat.  Production has slowed down and in some cases....gone to a very low rate of production.

Production of things that Germans produce?  Well....lets be honest.  Most everything of a non-agricultural nature is now produced in China.  Drug production?  Mostly India and China.  Most flowers are produced in Africa and flown into Europe.  

If you were holding a stock portfolio of 100-Million Euro in early 2020....you might be six to eight percent higher a year later. That collapse in mid-March killed off the bulk of your 'fine' year.

The travel business and tourism?  Crapped-out for all of 2020, and most expecting the same dire situation in 2021.  The Bahn guys (the national railway)?  Very much screwed-over.

So no one is really hyped-up for more taxes.  Maybe if Scholz had said this comment in 2019....it'd be a fair statement and worthy of discussion.  But here in 2021, it's just a lot of chatter without substance.  

The hope that the tax won't affect the working class?  Well....in 99-percent of tax-rises, it doesn't usually stop at the top guy....he just increases his cost level to the consumer, and you end up paying 4-to-8 percent more for some product....to fill the extra tax requirement.  

In simple terms....if you weren't happy paying 5.04 Euro for a McDonalds Big Mac last year....you probably won't be happy when it edges up in 2021 to 5.24 Euro to cover increased taxes.