I received my tax bill for the year recently. Since I’m a freelancer, nothing comes out of my invoices; my net income is my gross income. Every quarter, I fork over a chunk of change to the hyper-local tax office — an estimate of the tax I owe based on what I earned the previous year and what they think I will earn in the current year, after deductions.
The next year, you either get something back or pay more in, depending on what you actually earned. The estimate gets adjusted, and the process starts all over again, in perpetuity, like a game of taxation leap frog.
Of course, that’s just the income tax side of things. There’s also sales tax, which is 7% (for others, 19%) on top of everything I earn and goes into a separate quarterly filing. Unless you work for a public institution, that is, in which case the 7% comes out of your side. Because the house isn’t going to tax itself. C’mon!
To keep things simple, I’ll leave out the tricks, rules and exceptions built into the system that are supposed to save you money, or at least time, and support certain lines of work. Journalism and writing are two of them.
Most people think I am out of my mind that I do this all on my own. These days, third-party apps can help you do your German taxes and in English — part of a cottage industry of “expat services” that has popped up to protect a certain type of immigrant from ever having the feel the burden of living somewhere else.
When I showed up here, however, the start-up bros hadn’t yet caught onto the money to be made from such services, so none of this existed. It was just you against a system that didn’t know why you were here or what to make of you, and was only open three hours a week to field your questions, anyway, which generally only confused you further.
To clear up a common misunderstanding, I do not do my own taxes because I enjoy the pain, though I will admit complex systems interest me. There is something to be learned from how changing inputs affects outputs, and I prefer playing an active role in where my money ends up to just set-and-forget.
The bigger reason, however, is that I have not found a better alternative. Speaking only anecdotally, of course, my and other’s positive experiences with accountants and similar sorts of white collar advisors are few and far between. Berlin’s reputation of being out to lunch, literally and metaphorically, extends to its professional class. Even the good ones are usually over-worked and under-staffed, which is a big reason little gets done here on any kind of reasonable, mortal timescale.
The tax office is really into its deadlines — I was three days late once with a payment and got slapped with a €50 fine — so an AWOL accountant isn’t great. Good luck getting them to pay up; they have legal insurance and know more than you.
Best case scenario, you still need to track, organize, and provide your expenses and other financial information for an accountant to file on your behalf. In other words, you’re still doing the annoying part, and paying for the pleasure of doing so. Sure, they may find some neat ways to save you money, but you’re spending money to do that. (Granted, their fee is tax deductible.)
Questionable and inconsistent competency aside, another issue with these sorts of professions is that many of those working in them seem more interested in upholding the system than helping you navigate it. The time a lawyer tells you that you really should show more sympathy for Beamter who lost your application, or that a court may rule against you because the witness has the right kind of social standing — and he seems totally fine with it being that way — is about the time you start wondering what side they’re on.
You don’t need to pay someone to get tossed about in the feedback loops of concentric circles of a bureaucracy collapsing in on itself. You can do that on your own for free.
Even if you are blessed with the good fortune of having someone who will diligently print the email to fax to the relevant office and then follow up with the case worker to make sure she’s on it even though it’s Friday in two days, you still may not escape a corollary lecture on the moral hazard of living without Arbeitsunfähigkeitsversicherung.
Not to say you shouldn’t have Arbeitsunfähigkeitsversicherung, but that every person’s life and financial situation is different, there are extenuating circumstances, and the right thing to do may not be the right thing for you. The difference between the two risks confounding an inflexible system — and the professionals trained to master it — which is designed to handle one-size-fits-all and goes a little haywire when Plan A doesn’t perform as expected.
Ultimately, this assumption is based on a very good thing. Germany is, by and large, a functioning country with robust institutions that people generally trust. Check the right boxes and most usually get what they want or need.
Compare that to the United States, for example, where people get by in spite of, not because of, a system that demands constant improvisation and workarounds — 1,000 sizes that sort of fit some people, sometimes. This is not entirely by accident, as the U.S. was founded on the idea that people need protecting from the state. In Germany, as in most other democracies, people are protected by the state.
When crisis strikes — economic, pandemic or otherwise — American lawmakers have to scramble to figure out how to reinvent the wheel to keep everything moving. German ones mostly shrug as they give their wheels a little kick. Some structures may bend and need extra support — as the pandemic showed, and the approaching energy hellscape of war-spiked inflation is going to seriously test — but the slack is there.
I moved to Germany in the depths of the financial crisis, but you wouldn’t really have known it. There wasn’t a job to be had in America, but in Germany some work actually got created thanks to money the state was offering companies to keep people at least semi-employed.
When you realize the extent to which the state helps companies helps people helps pay taxes helps the government helps …, the default sense that everyone is on the same side starts to make sense. To a large degree, everyone is. Even some non-profits and industry associations that exist to lobby and challenge state power often get state funding.
A rising tide lifts all Gorch Focks.
At least 95% of the time, and therein lies the rub. The U.S. may look increasingly like a developing country whose streak of historical and geographical good luck is running out, but it is also an exponentially more diverse — and therefore more complicated — place than Germany.
The greater the diversity, the more often competing interests are going to clash, the more obvious structural discrimination and institutional bias are, and the more likely it is that systems will fall short, which anyway are harder to design as catch-alls when individual needs and circumstances can differ so drastically, as they do in the U.S.
Germany has plenty of the same issues. They are just less apparent and come up less frequently because the people using the system are more often the ones the system was made for. That makes an advocate’s very raison d'être something of a oxymoron; the time you need one most is when the system isn’t working, not when it is. With so many people conditioned to believe it will, it is hard to find those who are ready for when it doesn’t.
There are big, glaring examples, such as the infamous NSU murders, when police spent years chasing false leads because they assumed “Turkish gangs” were responsible for a series of fatal attacks against members of ethnic minority groups. No way it could have actually been far-right extremists in a country whose system is designed to sensitize society to the dangers of far-right extremism. (Oops.)
Given good-faith assumptions and a baseline trust in processes, you can’t rely on domestic news media to do a great job checking institutional errors when they occur. You’ve got a few critically minded reporters and outlets out there, but there are far more newspapers that will casually repackage police news releases and call it a crime story. For long-running issues embedded in society, such as all-things ACAB in Berlin, you’ll rarely see coverage that includes any voices from the side of the alleged wrongdoers.
You’ll often hear about cops getting injured on some operation against “extremists,” but you’ll rarely learn why or how, or if they should have been in that position in the first place.
Officials accustomed to things going to plan have been often stumped when they didn’t during the pandemic. When historic floods hit western Germany last year, thousands of people were blind to the danger barreling down because no one figured out how to warn them by app or SMS. Ukrainians get pinged every time a Russian missile is on its way, but Germans have repeatedly failed to zig when the war, and its geopolitical and energy consequences, has zagged.
Then there are the slow, grinding examples, such how a country as rich, educated and technically competent as Germany can’t seem to get its act together on digitalizing common services; providing reliable high-speed internet or high-speed trains; or high-speed internet on high-speed trains.
And the mundane examples: When a rush of homeowners filed a new property tax declaration earlier this month, the government’s central online tax platform crashed.
When I tried to deduct more home office expenses due to working from home more at the height of the pandemic, the tax office sent me a long form to fill out to prove it. Fine — except the form was designed for a full-time employee with a single employer, making most of the questions impossible to complete and therefore impossible to claim more deductions.
The system knows I am a freelancer, but at its heart, it’s made for 9-to-5 staffers, which then needs to bend over backwards to find ways to shoehorn in those who don’t fit a traditional — and increasingly outdated — employment model.
Fortunately, my case worker at the tax office has managed to retain most of his humanity, and I was able to phone him up and reason with him. The best he could advise was “just ignore those questions.” As things go, that’s pretty remarkable service and responsiveness. Not every tax filer is so lucky.
It’s not bad to be able to treat the tax office itself as your own kind of personal tax accountant, and cut out the expensive, questionably effective middleman. Though I did wonder, getting off the phone with them a few months ago, if by now there should even be all that much human involvement in the process at all.
A lot of countries similar to Germany have gone online and automatic with these sorts of things. Here, we are still often waiting on hold for a future that has long been other’s present.