German businesses have long suffered from high taxes, with the country's payroll tax system among the most burdensome in the world. But, in a novel move, the BDA employers' federation is planning to sue the government to force it to lower rates. From today's FT:
"The BDA is targeting the decision by the finance ministry to levy €5bn ($8bn, £4bn) a year from the now profitable employment insurance system and channel it into the federal budget.
For years taxpayers' money has flown in the opposite direction, with the government propping up the depleted finances of the state social security system.
Now the finance ministry argues the levy is needed to compensate for a recent reform of the employment insurance system that makes the federal government responsible for paying the bulk of social benefits to long-term jobseekers.
The BDA claims the levy is illegal and has accused Peer Steinbrück, the finance minister, of trying to consolidate the federal budget to the detriment of the social security system, thus preventing further cuts to social security payroll taxes."
Would something similar be possible in Britain? Would it have any chance of succeeding? It might be worth a thought, especially given the current level of discontent over high taxes.
Meanwhile, accountants continue to express concerns over the complexity of Britain's tax system:
"British accountants have a lower opinion of their own tax system than those in Australia, Canada, Hong Kong, Singapore and the US. Respondents to a survey by the Association of Chartered Certified Accountants gave the UK poor marks for fairness, complexity, transparency and communication with citizens.
It is another sign of concerns that complicated new tax rules, a higher tax burden and new powers for HM Revenue & Customs have made the UK tax regime less user-friendly."
Now, if only we could simplify the tax regime, businesses could spend more of their money on productive activities...