The causes of tax evasion

February 28, 2008

Random comment today.

In the context of the current tax evasion row opposing Germany and Liechtenstein: Wolfgang Münchau in his blog said last week that the causes of tax evasion are high taxes. Indeed, Germany has one of the highest marginal tax rates in Europe. And: Crush Liechtenstein and earn votes, but you’ll get the Cayman Islands. Despite the government’s popularity I find it a very sad sight, a government of one of the world’s most sophisticated countries boasting with stolen files- it’s all becoming very dodgy…. It is also very symbolic that Zumwinkel, head of Deutsche Post, the postal monopoly in Germany, who earned credit for imposing a minimum wage not for lofty social reasons but to drive out competitors of the market was the first high-profile tax evader to be caught. This somehow reflects a crumbling social and economic model inherited from the postwar period and the 1970s. 

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