According to what i found out about tax-income-structure and expense-structure the german state could cut tax-rates by est. 15-21% by restructuring subsidies for the economy, real-estate and if the EC stops subsidies for agriculture (structural and social ones could still exist).
This is not a proposition to do it this way, as it’s rather clear to me that one would need to take a closer look at details - it’s just a number-game to show, how big the impact of subsidies on tax-payers money is.
The actual numbers are rather difficult to estimate as the subsidies paid on the different structural levels (state, federal state, municipalities) are a bit intransparent, also i would be glad if you looked at this as a rough estimate rather than an exact calculation, as i just did some research on this in my rather rare spare-time.
German state-income-structure (source: German Federal Statistical Office):
State (Bund) 2006: 254.5 bln EUR
Federal states (Länder) 2006: 246.7 bln EUR
Municipalities (Gemeinden) 2006: 158.6 bln EUR
Wage-taxes (LSt) 2005: 153.6 bln EUR
Income-taxes (EKSt) 2005: 9.76 bln EUR
German state-expenses 2006:
State (Bund): 282.8 bln EUR
Federal states (Länder): 258.7 bln EUR
Municipalities (Gemeinden): 155.7 bln EUR
Subsidies planned for 2008 (source: German Ministry of Finance):
total: 21,5 bln EUR for the state-level
for the economy: 12 bln EUR
for real-estate: 3.8 bln EUR (a closer look would be needed at what to cut there and what not…)
subsidies paid by the federal states (Länder) and municipalities: est. 10 bln EUR
Germanies payment-relations to the EC:
in 2005 Germany paid 21.3 bln EUR to the EC which in turn puts ~40% of its expenses into agriculture - so we could save 8.5 bln EUR by not supporting an industry which should be able to sustain itself (as we all need food) and stop hindering third-world-countries to get more access to our agricultural markets.
So we could save 12+3.8+8.5+(est. 10) = 24.3 (34.3) bln EUR - which is ~14,9% (21%) of german personal taxes (153.6+9.76=163.36 bln EUR). So instead of a tax-deduction of e.g. 25% from your income, you could have e.g. 21.25% (20%).
Why i think we should cut those subsidies to a minimum:
- the private sector may spend its money with more thought than the administration which in turn may be better for our economy
- est. 80% of agricultural subventions go to 10-20% of the big companies in that industry which i assume don’t desperately need the money (or lets say, i assume all would profit more, if you chose where to spend your money…)
- in some agricultural markets the EC keeps prices artificially high to support those markets, which i think doesn’t reflect the interests of EC-citizens but those of agriculture-lobbyists and additionally make it more difficult for third-world-countries to sell their products to us
- companies that receive subsidies should be able to attract investments if they have a sustainable model and not by good lobbying
- why should you want to cross-subvention the building of someone who is basically able to afford a house?
- in general i would vote for strategic subsidies like giving incentives to save energy, invent products and found companies instead of supporting the survival of existing industries/companies - support the small and new, not the big and old.
The agenda for achieving this:
- check my numbers and build your own opinion
- in case you don’t live in Germany: calculate those numbers for your country
- try to force our administration to bring more transparency into all this at every administrational level (the subventions-report is already quite good and an interesting read, but it misses details about federal-states spendings)
- talk with our EC-partners about those agriculture (and maybe also other) subventions
- elect people thinking in this direction or become active yourself
- support organisations like Farmsubsidy and Oxfam as they work into this direction
- let me know, if all this looks like a naive miscalculation to you, then i’ll put more work into it 
Filed under: Politics | Tagged: Deutschland, EC, EU, Germany, Politics, Subsidies, Subventionen | No Comments »