Almost nothing worries people in Germany as much as the issue of “taxes and duties.” Whether on talk shows, in the office or at home, there are heated debates everywhere about the financial burdens that citizens bear.

Tension of many conversations: The State constantly takes more money from the people, but does not always use it sensibly. While federal, state and local governments report record revenues almost every year, in many areas of life the situation is getting noticeably worse.

Shattered police and judicial authorities, potholed roads, rotten bridges, dilapidated schools, very few childcare centers, deteriorating infrastructure: Germany is in a worrying state in many places. Add to this the sluggish economy and the slow expansion of digitalisation, and the image of the “sick man of Europe” becomes more pronounced. At least that's how foreign countries often judge us.

Huge tax revenue, but there is a darker side

It can hardly be due to lack of money. Last year, federal, state and local governments collected approximately 916 billion euros (in figures: 916,000,000,000) from citizens. The one trillion euro limit is expected to be exceeded for the first time in 2025. It is not surprising that Federal Finance Minister Christian Lindner (FDP) speaks of “strong incomes”.

For many citizens the calculation is less rosy. Almost everything is more expensive for them. High inflation, rising rates and social security contributions, as well as the huge tax burden, cause problems for people. Many fear loss of prosperity and social deterioration.

Among Germans' biggest fears, concerns about “tax increases and benefit cuts” rank third, ahead of the refugee crisis and climate change. A notable 57 percent said in 2023 that they feared greater financial burdens.

The State attacks almost every corner: when shopping, when eating and drinking, when driving, when working, when walking the dog, when smoking, when living: citizens have to pay money everywhere. In Germany there are around 40 types of taxes, from A for the alcohol tax to Z for the second home tax.

Germany has some of the highest taxes and tariffs in the world.

Experts believe that the limits of citizens' resilience have long been reached and, in some cases, exceeded. “Germany leads the world in terms of taxes and social security contributions,” warns Reiner Holznagel, president of the Taxpayers Association. A 2023 assessment by the Organization for Economic Cooperation and Development (OECD) confirms this.

The tax rate in Germany for a married couple with children is on average 40.8 percent. The burden is only higher in Belgium, at 45.5 percent. On average, the tax burden in the 38 OECD countries (including the United States, Japan, Great Britain and New Zealand) is 29.4 percent. Germany is also in second place in the ranking of taxes and contributions for single people.

If some politicians, especially those on the red-green camp, had their way, the rate would continue to rise. There are always calls – for various reasons – to increase taxes, at least for certain population groups or types of consumption. Politics prove to be inventive when it comes to choosing harmless-sounding labels.

The most recent example: the so-called “animal welfare tax.”

Despite massive protests by farmers, the traffic light coalition pushed to gradually reduce the tax rebate for agricultural diesel. To appease farmers, an “animal welfare tax” was discussed.

Planned “animal welfare tax” is a new meat tax

Federal Agriculture Minister Cem Özdemir (Greens) quickly came up with a concept that would increase the price of meat and meat products. The additional income aims to transform agriculture and, above all, promote climate protection.

Basically, “there is nothing more than a tax increase,” complains CSU head Markus Söder. And millions of people are wondering how the new meat tax fits with Finance Minister Lindner's guarantee that “there will be no tax increases” with it.

Politicians promise many things, especially during election campaigns, such as: “More net than gross” or “We will ease the burden on citizens.”

Already in 2009, the CDU/CSU and the FDP wrote in the coalition agreement:

“Citizens find (…) not only the level of taxes and duties discouraging, but also the complexity (…) of German tax legislation. That's why we want taxes to be 'simple, low and fair.'”

Unfortunately, these messages directed at people too often turn out to be nothing. Ambitious plans are being scaled back or completely buried in the face of the mammoth national debt, rising spending on social services and widening holes in the budget.

More recently, Chancellor Olaf Scholz (SPD) caused outrage for a brilliant breach of his word. In September 2021 he promised that the lower 7 percent tax rate introduced in the time of coronavirus would remain in the restaurant sector (“We will never get rid of that again”). From the beginning of 2024, the tax rate on schnitzel in restaurants has returned to 19 percent.

Traffic lights have little room to ease the burden on citizens

Everything remains the same: after such withdrawals, politicians cite adverse circumstances or unforeseeable catastrophes.

Currently it is about the war in Ukraine, the aftermath of the energy price crisis and the coronavirus pandemic, the fight against inflation, geopolitical conflicts and, last but not least, the budget disaster due to the unconstitutional financial maneuvers of the traffic lights.

In plain English: Regents actually have little room to make financial donations.

Finance Minister Lindner never tires of emphasizing that the tax burden in Germany falls “in general” under his responsibility. This year alone, citizens will pay “15 billion euros less in salaries and income tax,” the liberal emphasizes.

The Minister of the Economy, Robert Habeck (Greens), has also recently spoken of a “tax relief” so that German companies can become internationally competitive again.

According to the OECD, the tax burden for German companies was on average 29.94 percent in 2023, one of the highest values ​​in a global comparison. In France, the USA and the Netherlands about 25.8 percent are produced, in Sweden 20.6 percent, in Ireland 12.5 percent and in Hungary only 9 percent.

Therefore, widespread relief is needed.

But the truth is also that almost all the euros that citizens save in taxes are taken from elsewhere, according to the principle: what goes into the left pocket immediately comes out through the right.

The increase in contributions to health, care, pension and unemployment insurance, the explosion in rental prices and additional housing costs, the increase in daycare fees, the increase in public transport prices local, the drastic increase in the cost of the entire lifestyle: all this immediately erases small advantages in income tax. In the end, most people are left with less and less money.

FOCUS online publishes a focus on “taxes”

No one disputes that the State must collect sufficient taxes to be able to fulfill its tasks for the community.

But do responsible politicians always handle citizens' money responsibly? Why do cases continue to come to light in which millions of tax dollars are wasted on crazy projects? And how fair is our tax system really?

FOCUS online examines these and other questions with a focus on “taxes.” In the coming days a whole series of analyses, reports and interviews on this topic will appear on our website. If you would like to tell us about your personal experiences with taxes and tax waste, please write to us.

Frequently asked questions about this topic

Filing your tax return early counteracts procrastination and leads to an earlier tax refund. Processing at the Treasury usually takes between one and two months, although the average number of tax refunds from our clients is…

Stefan Heine Avatar

Stephen Heine

CEO of smartsteuer and trained lawyer and specialist in tax law

The processing time at the tax office varies between 30 and 50 days, depending on the number of staff and the volume of filings. The ideal is to leave it at the end of spring or beginning of summer, when everything…

Stefan Heine Avatar

Stephen Heine

CEO of smartsteuer and trained lawyer and specialist in tax law

Whoever is required to declare has until September 2, 2024 to submit their 2023 income tax return. If the deadline is not met…

Stefan Heine Avatar

Stephen Heine

CEO of smartsteuer and trained lawyer and specialist in tax law

For those who are not required to file a return, late filing can be beneficial up to four years after the tax year. However, the interest in late presentation is relative…

Stefan Heine Avatar

Stephen Heine

CEO of smartsteuer and trained lawyer and specialist in tax law