Most Germans perceive the distribution of the tax burden in Germany as unfair. A recent study by the German Tax Union (DSTG), reported by the Funke Media Group, indicates that only six percent find the system just, while three-quarters feel that average earners are the most disadvantaged. The survey involved 1,022 citizens and 9,227 employees of the German tax administration.
The findings revealed that 75 percent of respondents view average earners as particularly disadvantaged. This is attributed to their high share of the tax load and, in the view of the surveyed group, limited opportunities for legal tax savings. Only ten percent agreed that all citizens are treated equally within the tax system. Conversely, the wealthy and large corporations are seen as the main beneficiaries: 72 percent named the wealthy, and 68 percent named corporations.
The Tax Union proposes several solutions to address these issues, including significantly unifying the basis for calculating income tax. One suggestion is that all employees could benefit from a standard daily allowance, ensuring tax advantages don’t rely on differing case-by-case regulations. Furthermore, standardized categories and flat rates should be utilized more frequently, aiming to treat comparable cases equally and reduce the need for complex individual reviews.
Additionally, the DSTG advocates for greater transparency, suggesting a digital, real-time dashboard where taxpayers could track how much the largest companies pay in taxes and where the resulting revenue is channeled. The union suggests this could significantly boost confidence in tax policy.
Despite these systemic calls for reform, citizens feel there is considerable room for improvement in their direct interaction with the tax system. Forty-six percent admitted to feeling anxious about making errors when fulfilling their tax obligations, and 53 percent wish for more support. Only 33 percent find that filling out a tax return is straightforward, and just 27 percent can accurately understand how their total tax burden is calculated.
Bureaucracy and the communication provided by tax offices are also sources of significant frustration. Eighty-two percent consider the German tax system too complicated and incomprehensible, while 85 percent find that German agencies and authorities are overly bureaucratic. Only five percent reported understanding official notices and letters without problem, and 43 percent struggle greatly with them.
However, Germans show openness toward increased digitization of the tax administration, provided it actually reduces their workload. Seventy-four percent support the “Once-Only” principle, meaning data should only need to be submitted once to the state. Furthermore, 64 percent could envision an automatically generated tax return that they would only need to review and confirm.
This survey comes as Federal Minister of Finance Lars Klingbeil (SPD) recently presented a draft amendment for income tax reform, with the coalition generally committed to tax simplifications. Florian Köbler, the DSTG’s nationwide chairman, sees the study’s results as a clear mandate for politicians. He stated to the newspapers of Funke Media Group that Germany needs less bureaucracy, more digitization, and more effective fighting of tax evasion-the strongest reform mandate a government could hope for.
The reform need extends even to the administration itself. The survey found that 86 percent believe the administration is unprepared for the departure of the current large cohorts, and 89 percent are unaware of or only have a vague strategy for dealing with the anticipated staff shortage. Consequently, 90 percent fear an increasing workload. Despite these concerns, tax officials are optimistic about digitalization: 83 percent see advantages in automating routine tasks, and 81 percent support the use of AI-based assistance systems.
