The large percentage of Germans that regularly avoid taxes isn’t terribly surprising, considering the nation’s top income tax rate is 45 percent and the tax laws are notoriously confusing, according to Bloomberg. Nevertheless, the problem is huge for the country and getting worse. The issue is making a lot of headlines right now, just days after hundreds of wealthy Germans had their homes and offices raided by German authorities looking for evidence of tax avoidance.
The raids came after German authorities came into possession of a data DVD containing information on wealthy German citizens who transferred large amounts of money to Liechtenstein banks (Liechtenstein often frustrates Western nations due to the lack of transparency in its banking system). German citizens have been using it for years to shelter their wealth and avoid paying large taxes, though unfortunately for them, “everybody’s doing it” isn’t a proper legal defense. German prosecutors promise that charges will be brought against offenders, and say it’s only a matter of time until enough evidence is collected to file suit.
So far the only individual named as a suspect in the case is Klaus Zumwinkel (pictured), the former Chief Executive of Deutsche Post, the German mail company. Although he was a respected businessman in his country, these allegations forced him to resign last Friday.
German Chancellor Angela Merkel pledged to put pressure on Liechtenstein Prime Minister Otmar Hasler (who also doubles as his country’s finance minister) to increase transparency between Liechtenstein banks and the rest of Europe. Though Liechtenstein lies in the heart of the European Continent, it is not a member of the EU and therefore does not have to abide by the financial laws of the bloc.


