Michael Eriksson's Blog

A Swede in Germany

Posts Tagged ‘germany

Some points on the German IRS

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Detailing everything wrong with the German tax system would take an immense effort. However, a few points relating to jurisdiction and responsibility:

  1. Despite taxes being handled almost uniformly through-out Germany, no reasonable centralization has taken place. Instead each individual town has its own “Finanzamt”*, with large cities even having several, independently working, each poorly managed and filled with incompetent pea-counters.

    *I will use the German “Finanzamt” (pl. “Finanzämter”) when referring to the individual “office”—each being a somewhat independent government agency or sub-agency. When I speak of the overall collective of various tax-related agencies and/or the system as a whole, I will in (a slight misnomer) adopt the U.S. term “IRS”.

    This does not only cause inefficiencies compared to having a single entity handling taxes*, it also leads to problems like unnecessary changes of contact persons and addresses, additional efforts for tax payers to inform and coordinate after moves, the Steuernummer complications below, and delays when different Finanzämter need to coordinate the dealings concerning one tax payer (as with my recent move to Wuppertal).

    *For reasons like economies of scale, the easier supervision, a greater ability to stream-line, a greater ability to pick good staff, whatnot; especially, when this single entity has a considerably smaller number of offices. This, obviously, with the reservation that if no honest attempt is made by the IRS to do better, the advantages might not matter…

    The main advantage that this brings is the ability to personally deliver a message, thus removing postal delays and stamp costs—but after the abolishment of paper forms, there are few or no messages where postal delays are relevant and the stamp costs are usually smaller than the cost of the extra distance compared to the next post box. A secondary advantage is the opportunity to talk to someone physical in case of problems or need for clarifications—but considering the low competence levels, the usual lack of “customer” friendliness, and the benefits of having a paper trail* for any dealing with the IRS, this is only extremely rarely worth the trouble. In any case, both of these categories could easily be handled by providing a local skeleton crew and having all the real work done centrally.

    *There have even been the odd claim that someone went to the Finanzamt in person and was given information concerning his case orally—and that the Finanzamt later refused to give the same information in writing and/or to re-iterate this information at a later date, with the attitude that “we have already explained this, so piss off”. While I have no personal experience with this, even the risk should be a great deterent.

    Historically, this might have been justifiable; for decades it definitely has not been; with the removal of paper forms it has become a travesty. At this juncture, the real reason is almost certainly that the interests of the IRS, including its local wannabe big-shots and whatnots, trump the interests of the tax payers.

  2. There are two main identifiers used for a tax payer, the “Steuernummer” and the “[steuerliche] Identifikationsnummer”. The latter is an unchanging nationwide identifier that would be perfect for keeping track of the tax payers. It is basically never used… It does not appear on correspondence from the IRS, most forms do not contain a field for it, Elster does not store it, … To my recollection, I have only ever used it for the tax declaration, where there suddenly is a request for this identifier—and I had to go through years of correspondence to find the single letter in which I had been notified about this number.*

    *The first time around: I made sure to store it in a file of my computer for subsequent need.

    No, the number that is used is the idiotic Steuernummer, which changes according to the whims of the IRS. For instance, every single time that I have moved from one city to another, I have been given a new Steuernummer, because these appear to be specific to the individual Finanzamt. When I became self-employed, there was another change, despite my not moving, for reasons that are unclear to me*.

    *Likely there are further criteria (directly or indirectly) coded into the Steuernummer, e.g. relating to a general tax classification.

    The effects of such changes include that I have to pay attention that Elster does not include the old number in a given form, that I cannot just copy-and-edit an old letter to the IRS while leaving identifiers unchanged, and that I might need to use both the new and old identifiers concurrently, when I have dealings with both the new and the old Finanzamt—not to mention the risk of error that is created by having an ever-increasing list of Steuernummer to keep track of. (In a guesstimate, I have had more than ten so far, with various moves and status changes.)

    Of course, if the tax payer accidentally uses the wrong Steuernummer the Finanzamt does not have the common sense to just look the correct one up, nor to internally translate everything to the Identifikationsnummer based on the current or historical Steuernummer. No, they send a letter that rudely demands that he uses only the new one—despite the involved problems being caused solely by IRS incompetence.

    (See also excursion at the end.)

  3. Despite this high degree of geographical dispersement, I still have (at least) two different government institutions handling my taxes (both requiring separate notifications about addresses and whatnot, both needing separate payment):

    My income (and other regular) taxes and VAT are handled by the Finanzamt of Wuppertal.

    My property taxes are handled by a department of the city of Wuppertal.

    This is the more annoying, seeing that the property taxes have a very disputable justification and that the world would be better off without them entirely. (Even compared to the general observation that fewer and lower taxes would be better.) The nonsensical nature of these taxes is demonstrated by the yearly amount of ~120 Euro for my apartment—payable in quarterly rates. For me, the additional effort is disproportionate*; for the city a significant portion of this money is lost again just to keep the the tax system it self going.

    *Not just due to the obvious extra effort, but also due to secondary complications. Last year, I had agreed with the previous owner, who had received the last annual assessment notice, that he would keep paying to the city for 2017, and I would reimburse him accordingly. (He felt that this would be easier, after having consulted the city.) Lo and behold, for the second quarterly payment, I received my own assessment and the instruction to pay directly to the city. Clearing this up and redirecting money accordingly took out a chunk of both his and my time. This year, the city kept using my Cologne address, despite my clear notification of a move, resulting in long communication delays and additional efforts to clarify why I suddenly received a very nasty letter threatening to, I kid you not, break down my apartment door in order to collect the roughly 30 Euro of the first quarterly payment. (A separate post on this and some other recent IRS problems is in planning.)

    More generally, this is both an example of problems that arise through there being too many individual entities with taxation rights, and of how the German system for money distribution between various organization levels (federation, states, cities, …) is poor. See excursion below.

Excursion on moving and an out-dated world view:
Many problems in Germany, especially where the government is concerned, could be explained by outdated ideas about how people will live their lives. For instance, if we assume that the IRS works under the premise that people only very, very rarely move from one city to another, this could help explain the reluctance to change this broken system. Ditto other unnecessary bureaucracy around moves. Similarly, if people are not “supposed” to change banks, this explains why there are so many screw-ups when someone does. Similarly, the historically very poor opening hours and the problems around meter readings/chimney sweeps/whatnot are explainable under the assumption that everyone is married and a non-working wife can handle this-and-that at any working hour. Etc. Of course, in the modern Germany, people do move and change banks, there are very many singles, and even married women often spend nine or more hours a day away from home due to work.

Excursion on Steuernummer:
The problems are likely rooted in history, because the Steuernummer existed long before the Identifikationsnummer. However, it is doubtful whether it ever truly made sense to have Steuernummer be Finanzamt-specific—and even if it did, the technical means to overcome those reasons have been present for decades. If the IRS has failed to take corresponding actions to e.g. make each Steuernummer awarded after, say, 1990 permanent and personal, this in it self is a sign of great incompetence or negligence. To boot, that forms and whatnot still use the Steuernummer is absurd—-whatever the historical situation might have been, we now do have a proper identifier! Use it!

Some remaining justification for Steuernummer could possibly be seen, were it needed to differ between the same tax payer in different roles, e.g. when working for several companies in the span of one year or when, like me, moving from (regular) employment to self-employment. However, the former is already solved, if at all needed, by a third (!) identifier, the eTIN, and the second is obviously not the case, because (in the year that I switched) I was supposed to use the new Steuernummer for both my business and my time in employment… (Note that I am still acting in a capacity as the same natural person, not as e.g. a corporation.)

As an aside, I have a fourth and a fifth identifier, both related to VAT handling. These might, however, have a greater degree of justification because this part of the system is shared with various juridical persons*, and the use of the Identifikationsnummer, Steuernummer, or similar, could be problematic.

*I am not aware of how the other numbers or their equivalents are handled for juridical persons; however, the tax system it self is sufficiently different that constraints that might apply legitimately to e.g. a corporation should not be imposed on regular in-employment tax payers.

Most likely, the true reason is that the IRS calculates the Steuernummer using semantic information and then uses that information, precluding changes. This is a beginner’s mistake: Identifiers of this type should always be kept abstract and use of any information present should be reserved for very rare exceptions. For instance, if a Steuernummer was constructed through a Finanzamt (without coordination with other parties) generating a sub-identifier unique within its own “name space” and then appending a globally unique identifier for it self, this would be legitimate. If someone later takes the Steuernummer, extracts the part that identifies the Finanzamt, and then concludes that the tax payer belongs to that Finanzamt, this is not legitimate, e.g. because such use necessitates that a tax payer who moves to the “jurisdiction” of another Finanzamt be given a new Steuernummer, e.g. because it makes it hard to move to another scheme later. Identifiers should be considered abstract numbers, once generated, and systems that use them should be built accordingly! (As I have seen again and again through my more than twenty years in IT.)

Excursion on subsidiarity and Germany as a federation:
Possible objections against centralization include an adherence to the principle of subsidiarity (in general); and that Germany is a federation (in particular), and that any reform must consider the rights of the individual states (“Länder”) relative Germany as a whole (“Bund”).

Looking at states vs. federation, the influence of the individual states on taxation is highly limited* in the first place, and I see no obvious reason why a system in which the federation collects and administrates all taxes and distributes various amounts back to the states would be impossible within the framework of the German system. (Apart from administration, this is already more-or-less what happens. Note that this might be very different in other federations.) If worst comes to worst, objections of this type could do no more than speak against a centralization beyond the state level—it would not preclude centralizing the great number of individual Finanzämter on a per state basis.

*Most and the most important taxes are all ultimately handled by the federation. The most important on the state level is likely the inheritance tax, and this is the type of tax that really should be on the federal level, in order to avoid arbitrary differences. In contrast, e.g. a traffic tax could have some legitimacy on the state (or lower level) to accommodate e.g. local geography. (Even here, however, I would see it as more advantageous to unify the tax system entirely. This especially as the justification of various taxes appears to grow smaller the more “local” they are. Consider e.g. the absurdity of tourists and other visitors having to pay an additional hotel tax in and to certain German cities: The tourists stimulate the local economy through the hotel stay, restaurant visits, shopping, museum excursions …—and are punished for coming by an arbitrary and unethical tax, in a manner that, practically speaking, amounts to racketeering.)

As for subsidiarity, the more important part is the right to local/decentralized/whatnot decision-making, which (in the specific case of taxes) is not given as things are now, and where no or little additional restrictions would apply. The lesser part is local/decentralized/whatnot execution. Here there would be a change, but not a harmful change, seeing that this is the type of task better handled centrally. If subsidiarity is used as an excuse to keep things de-centralized that should be centralized, subsidiarity becomes something negative.

Excursion on single and multiple taxing entities:
Having more than one entity that has the right of taxation over a given tax payer is unfortunate*, in general, with problems including confusion, more bureaucracy, and, at least potentially, more arbitrariness. A better system would focus on one such entity, and then have this entity distribute money as appropriate. We could, for instance, have the federation as a sole tax collector (both in terms of administration and determination), which then distributes money to the states according to some agreement, who then distribute money to counties, etc., in a trickle-down chain; or we could have a county (or an even smaller entity) collect taxes and let them “trickle up”. (I would prefer the former, however, to make the tax system as uniform as possible.)

*Some room for exceptions is present when the tax payer is legitimately touched by different jurisdictions, e.g. when someone lives on one side of a border and earns money on the other. Even here it is more a matter of a necessary evil than a good, however.

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Written by michaeleriksson

June 15, 2018 at 3:50 pm

Living in Wuppertal / issues around heating

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After the true start of my much delayed sabbatical, I have now lived for roughly two months in a row in Wuppertal. My impressions so far are positive, and (to my relief) the reasonably-researched-but-speculative purchase of an apartment in a city that I had seen so little of appears to have worked out quite well.

Looking at the city in general, the one major issue is the potential deterioration of the city through population loss*. Major positives include many green areas, plenty of hills**, and a less “intrusive” environment compared to e.g. Cologne—noise levels, crowdedness of streets, traffic intensity, … are all much lower when comparing similar parts*** of the cities against each other. A major bonus is that the number of constantly traffic-violating bicyclists is far smaller****. (Living in Wuppertal is also discussed in at least one older post.)

*This, however, was something I was aware of in advance, and something that could turn around over time. It certainly helped in keeping the price of the apartment down.

**I like walking; I do not like running, spinning, tread-milling, … With the amount of hills, some steep, I can get a decent amount of exercise without boring myself.

***I.e. city center vs. city center, outskirt vs. outskirt, …

****This was a major issue in Cologne, to the point that there were more bicyclists (illegally) on the pavement than on the streets and designated bicycle lanes—and often riding with no regard for the pedestrians.

The vicinity of my apartment is particularly fortunate, including having a secondary city-center in close vicinity in one direction and a number of grocery stores, including a very large Akzenta* in the other—as well, as a number of kiosks, cafes, and whatnots. The Barmen train station is also close by, as are two stations of the “Schwebebahn”**. A potential particular bonus could be the Wuppertal Opera, which is also quite close by; however, I have yet to actually visit it, and cannot yet speak for the quality. And: Despite all this, I live in a quite street—much unlike what someone in e.g. Cologne could expect to do in a similar set-up.

*A super-market chain and subsidiary of the more well-known Rewe.

**An aerial tramway that stretches from one end of the city to the other.

Looking at the apartment, it self, I remain mostly satisfied and feel very comfortable. So far, I have three complaints: An incompetent property manager (as mentioned in an earlier post), a door bell that is so loud* that I actually chose to detach it, and the gas water-heater**, which is half the reason I felt motivated to write this post:

*Being awake without ear-plugs, the sound was outright painful. Sleeping using ear-plugs, I was invariable woken up when it tolled—and since the postman hits every single button on the bell system in a blanket manner to be let into the house, this is quite bad. I know that he does this, because when he comes when I am already awake, I have no problem hearing the bells going off in apartments on other floors of the building. (I will likely replace it with something more suitable in due time.)

**Here and elsewhere, my terminology can contain errors.

Instead of central heating, the radiators rely on a per-apartment gas heater (which also handles the hot tap-water). Originally, I thought that this would be a good thing, both because the otherwise quasi-mandatory, annual meter readings* disappeared and because I was now myself in control of the heating**. The latter part has panned out; the former not so much: True, the meter-reading has disappeared, but in turn there is both a yearly service and a yearly exhaust (and whatnot) inspection, effectively trading one day for two… This is the more absurd, seeing that German regulations ensure that the service company, which should have been eminently qualified to certify the exhaust situation, is not allowed to do so, this being the domain of chimney sweeps***. Costwise, the rule is that gas is cheaper than electricity when it comes to heating (including hot tap-water); however, much of this is canceled out by my now having to pay two consumption-independent base rates**** (gas + electricity) to the utilities company, instead of just the one (electricity). During my almost constant absence between my purchase and the beginning of my sabbatical, I certainly lost money this way, having to pay the dual base rate every month, but not using anywhere near enough gas to gain the money back. To boot, the heater takes up a very considerable chunk of space over the bath tub (much more so than the more common on-demand tap-water heaters), and it is placed in a manner relative the taps and the drain that a bit of carelessness easily leads to a head bump. Worse, only about half the bathtub is usable when standing, which considerably restricts flexibility during showers. (Worsened through the hose being a bit on the short side, but at least I can buy a longer hose.)

*Mostly, in Germany, there is a separate meter on every radiator of an apartment that (e.g. through condensation) tries to estimate how heavily used the radiator has been in the preceding year. This is then combined with the readings from other apartments and the known overall heating cost to estimate the cost for each individual apartment. Not a good system. (Problems include the intrusive annual reading, a great risk of errors during recordings and calculations, the influence of other heat sources, …)

**Central heating is usually handled quite poorly, e.g. in that the heating is only turned on during some months of the year without considering actual outside temperature, or that the heating is turned off during the evening and night (when most people are at home) and runs high during the day (when most people are at work). A particular complication is that some central heatings are manipulated according to time of day and external temperature in such a manner that the settings on the individual radiators become misleading and changes potentially harmful. For instance, assume that the central heating runs at a certain, low, temperature, that the outside temperature drops, and that I turn up the radiators—all fine and well. Now comes the next day, the building management decides to turn up the temperature of the central heating to (with a days delay!) compensate for the outside temperature, and I come back from work to an apartment that is uncomfortable hot—and where, to boot, nine or ten hours of this excessive heating have been wasted because I was not even in the apartment.

***Generally, the German system of chimney sweeps is under heavy fire from many directions, with several web sites dedicated to the topic, for reasons that include unduly frequent inspections of-this-and-that, unduly high fees, a very unfortunate mongrelisation of private and public roles (the chimney sweep being a private business often acting on behalf of the government and in a quasi-governmental role), and a very customer unfriendly attitude. To boot, the regulations are sufficiently complex that it is hard for the customers to know when the chimney sweep is acting as a private service company and when as a government representative, when he has to do want the chimney sweep wants and when he can tell him to shove it, etc. If I were willing to do the leg-work, I could likely write an article of several pages on this topic alone.

****A strong case can be made that base rates are unethical to begin with: They are usually far larger than the actual fix costs involved and appear to serve mostly to gain an undeserved profit on customers with a low consumption. This especially, when they are combined with other service fees, notably setup and installation fees. At least when it comes to gas, water, electricity, and (in the pre-flatrate era) telecommunications, a pure “per consumed unit” fee would be a fairer solution.

All-in-all, I would have been better off with central heating, which is the typical solution in Germany, especially if the tap water had been heated electrically and on-demand.

As an aside, I am surprised that gas is even still allowed considering the potential hazards. This partly through the risks per se, compared to electricity; partly because this is exactly the type of issue that tends to cause exaggerated populist demands for a ban. Cf. e.g. nuclear power, “gene foods”, or the German legal requirements to not only have smoke detectors, which I might be on board with, but to actually have them inspected once a year (!)—all of which have seen the counter-measures grow out of proportion to the danger.

Written by michaeleriksson

June 8, 2018 at 12:24 pm

Consumer rights and force majeure

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A major consumer problem in Germany (and likely large parts of the rest of the world) are “force majeure”-style* restrictions on performance and liability**.

*Some of these are related to actual “force majeure”, others merely follow a similar pattern of “what happened does not match my best case scenario; let the customer suck it up, then it is not my problem anymore”.

**It is often the case that the performance of a duty is legitimately hindered by an external event, but that does not automatically imply that the hindered party is legitimately free from liability, the duty to compensate others, whatnot.

In some cases, these restrictions can be seen as justifiable or necessary, e.g. in that an insurance company would not cover city-destroying bomb damage as seen in WWII: Chances are that an attempt to do so would simultaneously bankrupt the company and leave the claimants with only a fraction of the compensation they need. These will mostly be actual “force majeure” cases, but “force majeure” does not automatically make it such a case.

In many others, these restrictions are arbitrary, unfair, unexpected*, or otherwise customer hostile. Some cases can even be seen as borderline fraudulent, because the customer is mislead about what he can expect for his buck or what the true cost of a certain service is.

*In the sense that most customers and independent observers would have had a different expectation.

To look at a few examples:

  1. The events that can lead to a certain restriction are often under the close control of the business and entirely out of the control of the consumer.

    For instance, a few years ago I hired a storage unit—and was met with clauses that basically restricted the liability for any damage to my goods to nothing. This included water damage and theft.

    Now, who decides where water pipes are drawn and how they are maintained? Who what locks are used? What alarm system? Whether a guard will be present? To entirely avoid the risk of water damage and theft is impossible, but they can be reduced quite considerably—or made comparatively large. Notably, not making the business liable ensures that it has little incentive to actually invest in the security of the facilities, thereby increasing the risk that e.g. a break-in will occur…

    As an aside, the latter point includes a disturbance in the functioning of market forces: When the business is liable, it will (to the best of its ability) try to find a point where the overall expected cost from preventative measures, insurance, break-ins, … is minimized, leaving the overall economy a little bit better off. This especially with bulk insurance potentially being cheaper and definitely less effort than individual insurance (as discussed in the next item). When it is not, there is no-one in a position to balance these factors, the expected cost rises, and the overall economy is worse off.

  2. Scenarios like these hide and/or increase the true cost from/for the customer: He can either hope for the best, with an unknown risk/expected cost, or he can insure himself independently, which increases the cost not only through the amount to pay, but also through the extra effort to investigate alternatives* and going through the paperwork—assuming that there even is a reasonable insurance available… Far better would be for the business to be liable, with the business optionally taking out a corresponding insurance at a bulk rate, with a corresponding non-hidden increase of the rental fee, allowing customers to see what they actually pay.**

    *Particularly perfidious businesses are likely prepared to swoop in with an insurance-on-top-of-the-rent, where many customers will be willing to pay an over-the-market fee for the comfort of not having to do research and whatnot—for something that should have been included in the rental fee to begin with…

    **On the detail level, there are additional issues to resolve, e.g. where to cap the possible compensation and to what degree the customers must disclose the contents of their units in order to be covered. This, however, is unimportant for a big-picture discussion. (The same can apply to other points under discussion.)

  3. The events are often given a pseudo-“force majeure” aura or painted as unexpected when they are not (overlapping with the first item).

    For instance, in Germany it is common that just two centimeters of snow throws the railway system into chaos, while the railway companies virtually every single year are “surprised” by snow at some point in December. Sorry, at these latitudes, no-one has the right to act surprised when it snows during the winter, and corresponding measures to survive two centimeters of snow must be taken. (That this is not an impossibility is proved by Sweden, where problems of this size occur much later.) Sadly, the attitude seems to be that “because it snows on so few days of the year, we ignore the possibility of snow and let the passengers take the hit when it does snow—after all, we do not have to compensate them*”; something also seen in e.g. the lagging maintenance of the infrastructure, which causes many unnecessary problems and delays. (Here again, we also have a hidden cost issue: Would you rather pay 25 Euro and get where you want on time, or 20 Euro and be thirty minutes late on every second trip?)

    *A 60 (!) minute delay entitles the customer to a 25 (!) % refund of the ticket price. 120 (!) minutes gives 50 (!) %. For less than 60 minutes nothing is given; for more than 120 there is no further increase. Actually getting the refund is such a hassle that it often not worth the effort. Few provisions are made for other types of compensation and none for e.g. “I missed my flight” or “I missed two hours of work” scenarios. (Cf. official information from Deutsche Bahn.)

    For instance, strikes and the like regularly lead to service interruptions with no compensation—even when occurring so fast that customers have no reasonable chance to adapt their plans*. However: Firstly, strikes are a part of doing business and something that must be considered accordingly. Secondly, whether it comes to a strike is largely within the control of the business**, but not the customer, and the business*** should carry the responsibility vs. the customer.

    *For instance, a few years back I was to fly from (for the first time) Düsseldorf Airport to Munich for an interview. To ensure that nothing went wrong, I went to the airport several days in advance, had a look around, found out where I needed to go, etc. On the day of the flight, I returned—and found that there were hundreds and hundreds of people queuing to reach the security checks, and eventually realized that I had no chance of catching my flight, despite being there several hours in advance of boarding. The reason: A strike by security personnel that had been announced just a day earlier… A very healthy regulation would require strikes to be announced sufficiently far in advance that customers and employers can react to reduce the damage to the customers as an innocent third party. (What time frame is involved will depend on the circumstances, but with air travel as much as two weeks might be reasonable; for the local library two days might be enough.)

    **No, an employer cannot unilaterally tell his staff not to strike; however, he can influence how negotiations go, he can judge the damage done by strikes vs. the damage done by agreeing to demands and act accordingly, he could possibly negotiate a way of striking that is less damaging to the customers, etc. As long as the customers carry the main consequences, however, he has lower incentives to avoid the strike.

    ***However, with the option to in turn make demands towards the strikers in at least some cases, notably when the strike was “wild”.

    As an aside, a major problem with strikes in Germany, from a union perspective, is that they often do more to turn the customers against the union than to convince the employers. Forcing businesses to compensate their customers for the effects of strikes could change this. (As could a more rational strike behavior, but that is another topic entirely.)

  4. Flood damage is usually excluded in a blanket manner from regular insurance policies, because the insurance companies are afraid of being stuck with thousands of large simultaneous claims in a river-rich country.

    However, this goes contrary to a layman’s expectation and likely leads to many not having the coverage they expect. Further, separate coverage is not always on offer, potentially forcing the customer to go to a second insurer, with the extra research and whatnot. I would also strongly suspect that the cost of separate coverage is higher than a built-in coverage for the costumer, because the overall fees and risks cannot neutralize each other and because a greater markup is added.

    A better solution would be to include flood damage, raise the fees for people in high-risk* areas (possibly with the option of a voluntary opt-out), and increase the re-insured amount. The raised fees ensure that the insurance company does not lose money; the re-insurance that it is not crippled by a major flooding.

    *Consistent with the idea that whoever controls the risk pays the additional cost; however, note that the control here is lower than for the storage rental above, e.g. because the likelihood and consequences of a flooding river is to some part controlled by (other) humans, not just nature, and because we cannot always choose where we live.

Notably, German businesses often have the attitude that they have no liability for anything, that it is always the customer’s (or someone elses) problem, or similar—even in the absence of a corresponding contractual clause, real or pseudo-“force majeure”, whatnot. (In addition to my own experiences and what I have heard from others, I have read a great number of articles dealing with consumer issues in a German context. The situation is horrifying.) Examples include retailers systematically sending the customers directly to the manufacturer when a product is defect*, (often for-charge) hot-lines that are staffed with incompetents, various hoops that have to be leaped through in order to get compensation**, pretending to be unaware of legal rights or deliberately telling customers something that does not match the legal situation***, …

*According to German law, the retailer, not the manufacturer, is obliged to correct problems. The retailer might later have the right to turn to the manufacturer for help or own compensation, but that is between him and the manufacturer—not the customer and the manufacturer.

**A scenario that I have encountered several times, myself, is that I write an email, detail what is wrong, and receive a form back that neither allows nor requires any information not already provided—together with the refusal to treat my complaint unless I spend five or ten minutes (redundantly!) filling out the form, another twenty running by the post office, whatnot. Other common problems include repeated requests for information already provided, requests for mandatory irrelevant information, refusal to handle anything by email, … It is quite common that the effort to receive compensation (see a problem solved, replace a defect product, whatnot) is so large that it exceeds the intended benefit—honi soit qui mal y pense…

***For instance, as I made my last order with Amazon Germany, possibly some fifteen years ago, my request to cancel a purchase was originally denied with the claim that Amazon’s help pages (!) ruled this out—never mind that German law gave a fourteen day return right, no questions asked, for any online purchase…

As an aside, expanding on a few items above, I am generally strongly in favour of whoever controls the risks/costs and who gains the benefit from a certain behavior or whatnot also carrying the costs/risks/consequences/… Above, we have e.g. the principle that whoever controls the risk of a break-in has the responsibility to reimburse others for not preventing a break-in. Other examples include e.g. that when someone performs an action to his own advantage and (negative) externalities occur, he should compensate others for these externalities*.

*Consider e.g. a factory that earns well while polluting (compensating efforts, some type of environmental tax, or similar, is called for) or a land-lord who performs extremely loud renovations over months in order to later increase rents (tenants should be compensated for reduced quality of life).

Written by michaeleriksson

April 19, 2018 at 10:54 pm

German taxes and Elster IV: Elster offline

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And yet more problems with Elster and the VAT*: As I tried to call up the corresponding web page for January’s VAT declaration, I was met with a browser error indicating that the site could not be found. A few hours** later—same thing. A few days*** later—same thing. Today—same thing. I now tried pinging the server—no response. I tried a web search to find out what was wrong—and, to my great surprise, found a functioning page.

*Cf. a previous post on a late fee and another discussing the original VAT issue. On a positive note, my complaint against the late fee was approved; on a negative, I strongly suspect that I will receive another late fee over the events of this post…

**Even a well-managed site can on occasion be temporarily unavailable. Elster is not well managed…

***With the exceptional incompetence displayed by the “IRS” so far, I would not have been the least surprised, if they were unable to bring their servers back up within an even semi-reasonable time frame, had deliberately shut them down for maintenance and failed to provide a temporary explanatory page, or similar.

Apparently, the original official site of elsteronline.de, bookmarked by me, was gone, now replaced by elster.de. The switch alone is questionable, seeing that it can lead to exactly this type of problem—however, that no corresponding message was left for even a transitional phase, that is inexcusable. (I note that, from my browser history, such a transitional phase must have been present, since previous requests appear to have been silently redirected—exactly the thing not to do.)

Elster online, my ass! Elster offline!

Written by michaeleriksson

February 18, 2018 at 8:41 pm

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Follow-up II: The German 2017 election

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In October 2017 I wrote:

We are now two weeks past the last German parliament election, and there is still no certainty about who will rule with whom—however, there is a fair chance that we will be rid of the conservative CDU/CSU and social-democrat SPD coalition.

The current situation is depressing in (at least) two regards:

Firstly, even now, close to five months after the election, the issue has not yet been entirely settled, a renewal of the CDU/CSU and SPD coalition only now being finalized. At this tempo, it would have been faster to hold a re-election and settle the issue properly. Certainly, a re-election would have been a better solution for other reasons (cf. below).

Secondly, the result, this renewal, is the worst case scenario. (Among those with a realistic chance of occurring.) The only positive thing that might come of it is a further weakening of SPD. (Cf. my original post.) Sadly, this situation is partially the consequence of a more natural coalition partner doing the right thing—unlike SPD.

As I have written before, this type of coalition poses a major threat to democracy, grossly violating the trust given to these parties by their voters, and even eliminating the relevance of the voters’ will from the process: Any vote not given to CDU/CSU or SPD is effectively wasted—and any that was given to them only marginally affects who is the stronger party within the government that would have been anyway. At the same time, politicians often complain that too few people vote, sometimes even in an accusatory manner*. Why should people bother voting when their votes have so little effect? When they know that the politicians merely see them as a means to end or, worse, as a mere nuisance? To boot, such extremely long negotiations prior to forming an alliance ignores the will of the voters for an unconscionable amount of time, during which the old government, based on an election long past, continues to rule**.

*Along the lines of the non-voters not doing their civic duty.

**In this specific case, the harm is small, seeing that one constellation of an unholy alliance is replaced by another constellation of the same unholy alliance; however, this would not generally be the case.

Unfortunately, this problem of a Democracy Lost is not in anyway unique to Germany—it is a global phenomenon. It is, however, more tragic in Germany, where the awareness of the dangers rightfully should be larger than elsewhere, seeing both how the Nazi used and abused a democratic process to gain power and how a quarter of the country was stuck in a totalitarian pseudo-democracy for most of the post-war period.

As an excursion, while the current situation proves that the German election system is flawed, it does not necessarily prove the superiority of e.g. the U.S. (republic) or U.K. (parliamentary, first-past-the-pole) systems over an (almost) plain representational parliamentary system. The latter is used with considerably less problems (to-date, knock-on-wood) in e.g. Sweden, due to a small-but-crucial difference: The German system is geared at having a majority government; the Swedish at a plurality government—in rare cases even a (non-plurality) minority. Governing without a parliamentary majority does weaken the rulers, but it has so far worked well (in those case where no majority was reached). Furthermore, a plurality government is more democratic than a forced, unnatural majority of the type currently ruling Germany—it can even be argued that it does better than a majority government, since smaller parties are given more sway and a chance to influence at least some issues through actual voting (as opposed to debating and working on committees). I might even go as far as saying that a weaker government is often a positive in its own right, keeping the politicians (less dis-)honest and preventing too much damage to be caused by those incompetent or too driven by ideological agendas. An exception occurs, obviously, in times of great crises, notably wars, where a strong government can be imperative—but there is no such crisis. (For that matter, a government that does not yet exist, due to lengthy negotiations, is even weaker than a weak government that does exist…)

Written by michaeleriksson

February 13, 2018 at 12:27 am

Stay away from Clevvermail

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For my business activities, I have tried a few service companies that seemed to offer something that would make my life easier. Mostly, they have not—and in one case, I had a considerable amount of extra effort for absolutely nothing in return. I refer to the mail-service company, or quite possibly scam*, Clevvermail:

*To tell the difference between extreme incompetence and evil intentions can be quite hard, but with the most recent events I do tend towards “scam”. Interestingly, the name is quite apt: While the intention of the “clevver” part is probably to invoke associations of the English “clever”, a word occasionally used in Germany too, especially in advertising, my first association was with Klaas Klever—the German name for that utterly amoral and ruthless, yet often incompetent, business duck John D. Rockerduck. Note the repeated letter doubles (“K”/“K”, “l”/“l”, and “aa”) for Klaas Klever and the deliberate doubling of “v” in Clevvermail. To boot, “Klever” likely originated as a similarly deliberate misspelling of “clever”.

Clevvermail at least claims to offer postal addresses in various cities of the world, including in Germany, with the option to forward the mail to another address—something that would have been perfect for me, with long stays in other cities than my official home, often at varying addresses in these cities: I give out my Clevvermail address to others and still receive the mail wherever I happen to be.

I optimistically opened an account—and have had nothing but costs, waste of time, and annoyances to show for it. The problems ended up being so large that I had only given out the address to several other parties and, to my recollection, not received one single piece of mail at the time I terminated the account again. With the sheer amount of problems, my memory is not good enough to give all details, but an incomplete and/or approximate list includes:

  1. An arbitrary rejection of my credit card in combination with 3D-Secure—and a refusal to even attempt to authorize the same credit card manually. To boot, this refusal was rooted in the claim that “da wir hier schlechte Erfahrung mit der Zahlungsmoral unserer internationalen Kunden gemacht habe” (“because we have had poor experiences with the willingness to pay [literally, “payment moral”] of our international customers”, which borders on an absurdity in light of Clevvermail’s own behavior, lack of morals, and invoicing practices. To boot, I was not an international customer…

    Unfortunately, no other reasonable* means of payment was available, short of money transfer, forcing me to pay each bill manually… (Something which will be highly relevant below.)

    *Notably, the German standard of “Lastschrift” was not supported.

  2. The need to register using a copy of my passport, which is strictly speaking an illegal requirement. Clevvermail’s comment: Die Gesetzgebung hat sich da in Deutschland noch nicht ganz den neuen Möglichkeiten des globalen digitalen Wirtschaftens angepasst. (Roughly, “German legislation has not quite caught up with the opportunities of the global digital economy”—or: We know that it is illegal, but we do not agree with the law and do what suits us best regardless of it.)
  3. A user interface that was cumbersome and regularly malfunctioning.
  4. Highly incompetent and uncooperative service staff, who on repeated occasions ignored my actual questions and/or gave “smart ass” answers that told me what I already knew.
  5. The (illegal) sending of non-solicited advertising emails, including for services that are extremely unlikely to be of interest to the average customer. Why should I want a postal address in Moscow* just because I have one in Germany? Barring other scam companies, there is no real reason for anyone to react positively to such an offer: Either someone already is moving in on Russia or he is not. If he is, he will make corresponding inquiries; if he is not, his plans will not change—and “not” is what will apply to the vast majority of the customers.

    *I cannot guarantee that Moscow was one of the specific cities involved in these advertising emails, but the principle of the example stands with any foreign city.

  6. The failure to send me my bills in a timely manner, or at all—something the more absurd with a company that deals with mail services. Indeed, I repeatedly received threats about account suspension due to unpaid bills before receiving the bills. In the end, my account was outright suspended, with no prior notice, without my having received a bill for the amount due… After Clevvermail refused to remedy this, I finally had enough and terminated my account, effective immediately.

It does not end there, however: This Saturday, more than a year after the termination, I received two spammy looking messages that I only ever opened because they used a specific email address*, that made vague claims about debt collection—and did so in English**. After I contacted Clevvermail, as the sole party I had given this address to, they now claimed (again, in English) that I would own them close to fifty Euro, for a period extending months beyond my termination… To boot, they now claimed that they were never able to close my account, “[s]ince only users can delete their accounts”***—however, according to prior communications, I would only be able to close my account per the web interface once the open bill (at the time I terminated the account) had been paid… Kafkaesque, amoral, and certainly not something a German court will accept.

*I usually give out individual email addresses to individual businesses, implying that I a) can block that one single address (e.g. due to spam) without affecting my other correspondences, b) know who is to blame for any abuse (e.g. through handing said address to a spammer).

**Note that this is a German company, that I live in Germany, that prior correspondence had been in German, … Of course, most Germans are quite poor at English, implying that most of the people receiving such communications would be at a severe disadvantage in terms of replying to, possibly even in terms of understanding, the communications.

***A claim which is almost certainly false: Any even semi-reasonable administration interface would give the appropriate administrators such abilities—and in a pinch there is always the opportunity of direct access to e.g. a database system. (I have spent twenty years in the software field and I have yet to see a system which runs without occasional such interventions.) To boot, even if there were no such technical ability, this simply is not my problem.

I can only unambiguously and emphatically tell you to stay well clear of this rotten-to-the-core “service” provider. For my part, I will presently contact both the police and the corresponding regulatory authority. (Poor customer service is not a crime, but the current fraud is—and so is at least the way the passport situation was handled.)

As an aside, it can safely be assumed that much of Clevvermail’s business is aimed at other parties of dubious morality or legality, including businesses trying to creating the incorrect impression of a local or international presence, front and shell companies, and various people seeking greater anonymity for illegal purposes. (As well as many with perfectly legal reasons and motives, like yours truly.)

Written by michaeleriksson

January 24, 2018 at 1:19 am

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German taxes and Elster III

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In a telling development of what prompted my original post (that I just had wasted several hours trying to use the third-rate Elster products to file my VAT):

I recently received a notification from the “IRS” that because I had exceeded the normal deadline, caused exclusively by their incompetence, they would book me a 35-Euro late fee.

They prevent me from fulfilling the rules they impose to their one-sided advantage, they waste hours of my time, they bring me to the point that I want to throw my notebook at the wall—and I have to pay them…

Of course, the complaint I just filed took another fair bit of time—and forced me to use Elster again…

I can only re-iterate that the situation is utterly inexcusable. Elster, the overall tax system, and the German IRS all need to be completely over-hauled or replaced by something better.

Written by michaeleriksson

January 7, 2018 at 4:40 pm

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