Michael Eriksson's Blog

A Swede in Germany

Posts Tagged ‘germany

German regulations sabotaging markets

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Yesterday, I was skimming through a few of my older texts and stumbled upon the claim:

This too is likely a result of the flawed German model: The only reason that realtors do not have money effortlessly pouring in, is that the potential profits have lured too many people into this business…

(In the context of complaining about realtors, their cost, their service level, and the proportion of realtors to real estate in Germany.)

If there are, in some sense, too many realtors, should that not drive down the prices and increase the service level? Should not the more competitive (better, cheaper, more efficient, …) realtors drive the less competitive off the market?

Unfortunately, the aforementioned flawed German model strikes again (see the link for more details): Because realtors provide a service to the seller* for which the buyer pays, the whole price argument goes down the drain. The seller hires the realtor in the knowledge that he will not need to pay him, and therefore does not** care about the actual price, implying that a realtor who lowers his prices will lose in income per object without being handed more objects. At the same time, there is a regulatory upper limit on the percentage*** of the object price that the realtor may charge. In combination, this leads to almost all realtors charging the regulatory limit on almost all objects…

*Until fairly recently, this situation applied both to rented and sold objects, which strongly contributed to the historical development of the situation. Today, landlords have to pay for themselves, and I restrict the text to speak of “seller” (and so on). It is to be hoped that this change will at least partially remedy the problem—but it is unlikely to truly do so unless the seller–buyer situation is also changed.

**With some reservations for objects that are hard to get rid of and where the realtor’s fees might be the last straw for a prospective buyer. That objects are hard to move is the exception in today’s Germany, however, and the realtor’s fee is usually too small (as a proportion of the overall price and costs) to be a major psychological deterrent. (Note that there are a number of other costs than the actual price and the realtor’s fees, including a purchase tax, various administrative fees, bank fees and interest when a loan is needed, fees to the building manager (for an apartment), and possibly a few others—and that is not even counting the costs for the actual move, needed repairs, and whatnots.)

***An interesting twist is that since fees are percentage based, realtors are paid the more, the easier their job is: In an hotter seller’s market, unloading an object is correspondingly easier; in a hotter seller’s market, the price (and thereby the realtor fee) is correspondingly higher.

However, this also means that there is little incentive for realtors to try to compete through better service: If they try to do more for the sellers (let alone buyers…), they have extra costs that cannot be put on the bill; and such a “more” would be bad business. (Obviously, someone who has a better turnaround might be able to sell more objects, but with the over-establishment present, there is no guarantee that such would be found. The seller might be happier with a faster sale, but most will not need to sell another object for the next two decades, leaving word-of-mouth the main benefit to the realtor—then again, since the seller need not even understand that his sale was unusually fast, there might be no word-of-mouth either.)

The problems are worsened by the minimal qualifications needed to become a realtor, allowing more-or-less anyone to move onto the market at will, increasing the risk of over-establishment. This also contributes to keeping the competence levels down, because those with a brain will usually have sufficiently good prospects elsewhere that they do not consider becoming realtors, while many who are worse off believe it to be an easy way to get wealthy. (Which it, except for over-establishment, would have been, at least in the major cities.) This is not only immediately bad for both buyer and seller, but can also have an indirect effect through poor “strategic” decision: For instance, if better service does lead to a sufficiently higher turnaround (cf. above) that the increase in costs is considerably outweighed, a less competent realtor is less likely to realize this.

To this we have to factor in the various problems discussed in the linked earlier text and in an even older, and it is clear that the law has very severely reduced the ability of market mechanisms to improve the abysmal situation— we are left where we were.

Unfortunately, there are quite a few other areas in Germany that suffer from very similar problems.

Consider e.g. taxicabs*: What happens when someone starts a new cab company (be it larger scale or as a one-man operation) or when an existing company adds a few new cabs? Do the prices drop? No—but the line of cabs at the train station or airport that waits for their turn grows longer… In effect, the prices remain the same, the service level remains** the same, and each cabby or cab company just ends up with a smaller piece of the pie. This to the point that I am often*** asked point blank whether I would like to arrange for this specific cab/cabby to pick me up again after work—business must truly be booming… (The extremely negative reactions to Uber and similar services, and the attempts to ban them by court, are understandable, seeing that they drain the market further. However, these reactions are also a great shame, because they do/would introduce a positive competition, and the bans kill that. To boot, Uber shows that regular cab companies, and/or the regulators, might do well to reconsider business models…) When someone calls for a cab, it is pretty much the same, except that there is now a virtual line of cabs…

*The fare conditions are prescribed by the respective city (or some similar entity).

**In this specific setting. In other settings, e.g. how soon a cab can be sent to pick someone up, there might be a positive effect; however, it is unlikely to be very large considering the overall situation.

***On those rare occasions that I do take a cab. Mostly I get by on foot or with public transportation.

Or consider the “Buchpreisbindung”*: Bookstores cannot compete by price, implying not only that books remain unnecessarily expensive, but also that e.g. a “lower price for lower service” or a “better opening hours for a higher price” strategy cannot even be attempted. A family bookstore that might have better margins, absent the need to pay employees, cannot compensate for a smaller set of available books by dropping prices, neither can it drop prices in the “off season”** to get by until business picks up again. Online retailers cannot compete with a lower price based on lower costs. The single low-volume bookstore in Hicktown cannot raise its prices in order to survive; the one-of-many in central Metropolis cannot lower them for a bigger share of the customers. Customers do not have the ability to travel a little further for a better price and a bulk-buy. Etc. In contrast, a large bookstore chain can buy the books at a greater discount from the publishers and pocket the difference. Predictably, the big chains and publishers are great fans of the Buchpreisbindung—they get most of the extra money from the customers and their smaller/newer/paradigm-changing competitors are hindered.

*The obligation for book publishers to set a fix price for every book and the simultaneous obligation for bookstores to sell at exactly that price. I note that the book industry in most other countries, and e.g. the DVD and CD industries in Germany, work without the equivalent of a Buchpreisbindung.

**I am frankly uncertain what this would be for a bookstore; however, there are definitely seasonal variations, including around Christmas and the “back to school” rush in the autumn.

The situation is made the more annoying by the, often idiotic, attempts to justify the Buchpreisbindung, including that it would benefit the smaller stores*. Other arguments point to advantages for first-time authors or small publishers—but how are they helped? The Buchpreisbindung only mandates a fix selling price for any given book, it does not prescribe the amount—and no price is of any help unless a sale takes place! A smaller publisher could try to compete by setting a lower price than comparable books from the competition, but if the book then becomes a hit, a lot of the potential winnings would be lost, because the price cannot trivially** be raised back to the competitions’ level. Vice versa, if the price is originally set too high for the book to sell, lowering it to make the book more attractive is not trivial. Similarly, the first-time author could try to sell himself cheaply, but it is not a given that any publisher would cooperate (preferring other authors who are established and give them a greater profit margin), and he otherwise faces problems similar to the publisher’s. Of course, if (!) and to the degree that these justifications do hold, they are not necessarily doing the world a favor, seeing that they would often artificially keep inefficient businesses afloat at the cost of someone else…

*This seems highly unlikely both due to reasoning like the above, the overall reduction of the market caused by higher prices, and the fact that smaller stores de facto are being wiped out by the larger chains. (The larger chains can compete with more books, a big cafe, name recognition, an advertising budget, special events, better trained staff, … The mom-and-pop store? Precious little…) In as far as the argument holds, e.g. in that the many smaller store with higher costs would be supported, it does not hold by altering the relative ability to compete—but through forcing an artificial subsidy from the unwilling customers.

**Strictly speaking, it can raise or lower the price relative the bookstores, but since their willingness to pay is limited by what they can charge the readers (i.e. the fix price) and since a price change towards the bookstore has no effect on the readers’ willingness to buy, this is not that much of a help. Apart from that, it might (I lack detail knowledge) even be that the publisher would be forced to put out an entire new edition to change the price—and even if that is not necessary, there would be the problem of communicating the price change everywhere. (And what about a price lowering that went beyond what the bookstores originally paid for their current stock…) For price reductions, there is always remaindering (cf. below), but that could lessen future chances (especially for the author) and might not give much flexibility, seeing that remaindered books are usually sold in competition with other remaindered books, which necessitates a very major price cut to be competitive in the new setting.

An interesting twist is the extensive remaindering of books that have sold too poorly, which proves how flawed the system is: After some time period, books can be released from the Buchpreisbindung, and then take ridiculous hits in price, e.g. going from 25 to 5 Euro in one day, instead of gradually drifting downwards over time.

Oh, and yes, if the Buchpreisbindung worked as advertised, would there not be an abundance of new or low-selling “high literature” authors to be found in a bookstore? One might thinks so, but they are a very small minority. In fact, about half a modern German bookstore has no books at all, in favour of Cafes, reading areas, calendars, school supplies, …—and much of the rest is mass- or publisher produced, ghostwritten, whatnot. The cooking and travel sections alone might take up a quarter of the actual book part of a bookstore. Possibly half the books are translated from other languages (or imported without translation), and here the Buchpreisbindung has very little effect on the authors. Etc.

Other government induced market failures and injustices abound in Germany, as with e.g. the construction industry and “Kurzarbeit”: During the summer, the construction industry booms and charges high prices; during the winter, the temperature and weather conditions lead to a scale-back. However, instead of the industry now trying to find more work through a lowering of prices, or the individual construction worker by a temporary switch to another field, what happens? The construction companies go to the government, point to the lack of orders, and request a “Kurzarbeit” classification, allowing them to reduce hours and wages, with the government covering most of the wage reduction towards the construction workers. In effect, the construction industry can both eat its cake and have it too, at the cost of the tax payers and customers.

Pharmacies might be a strong candidate for this discussion (and were the first non-realtor example that occurred to me): Despite a massive over-establishment, pharmacies remain unduly pricey and lacking in service quality (see excursion)—implying a similar market paradox. However, I am uncertain whether the reasons are similar or, as it were, another disease manifests with similar symptoms. The strong regulations on the profession might be a partial reason, as might a partial or indirect price-regulation and price-insensitivity*. It might also be something relating to a poor ability of customers to compare prices, restrictions on the size of the individual pharmacy group** preventing economies of scale, and an undue trust placed in pharmacies by the naive.

*A significant part of the business is, obviously, prescription drugs. These are largely paid for by insurance companies, implying that (a) the individual customer is significantly less price sensitive than he ideally should be, (b) prices are geared at what the insurance companies are willing to pay, with any cent left off the maximum price being a cent lost. (There might or might not be additional regulations or central agreements controlling what the insurance companies pay.)

**In my recollection, a maximum of four (!) individual pharmacies; however, I could be wrong.

Excursion on pharmacies and service:
The problems include poor opening hours and deliberate attempts to fool customers into buying homeopathic* quackery products, the most expensive product that they have in a given product group** (without mention of alternatives), and/or something that the local drugstore or supermarket sells for a fraction of the price. Several of my talks with pharmacy staff*** have had more in common with a sales pitch than with medical advise. The one time I really would have needed advice, after some nit-wit physician actually prescribed (!) a homeopathic product, not one word of warning was given: No “are you aware that this product is useless”, no “are you sure that you want this”, no “you might want to get a second opinion”, … (I only discovered the issue when I had arrived home, leaving me understandably furious.)

*While this is for all intents and purposes fraud, it is unfortunately still legal in Germany, due to a long tradition and a strong lobby. (Or to be more specific: Either the pharmacy worker is so medicinally incompetent that she (it is almost always a woman) should be banned from the profession, or she is engaging in deliberate fraud by trying to sell an over-priced product that she knows does not work.) This is the worse, because it does not end at a fraud against the individual customer, it also helps perpetuate and legitimize homeopathy as a whole, thereby committing fraud against society.

**I recall once buying adhesive bandages and, of the dozens of variations present in the store, immediately being led to one with silver (as an anti-bacterial or whatnot) in it that cost twice or thrice the regular price—even by pharmacy standards. The regular ones were in turn twice or thrice as expensive as in the drugstore… Not only have I used the regular kind, without any type of problem, my whole life, but I usually only use up a small portion of the individual bandages before the claimed expiry—making the multi-markup silver ones a ridiculous waste of money. (For me… For the pharmacy, it is a high-markup, low-cost item.)

***Note that the people at the counter are not necessarily pharmacists proper (which requires formal qualifications comparable to those of a physician in Germany), they can also be various helpers. However, even these helpers underlie strict regulations and are much better qualified (at least, on paper) than what is needed for non-pharmacy counters.

Sadly, pharmacies like to claim that their good costumer service and medical advice would be highly valuable (thereby providing a pseudo-justification for the high prices and the qualifications needed). I have never found this to be the case: Yes, they do try to explain to me how to take Tylenol every time I buy a package—but why?!? I can read… (There are extensive instructions in the box*.) I have also actually used them before… If in doubt, to paraphrase a furious physician on “Scrubs”, having just been called down for a consult by a new intern: “It’s regular strength Tylenol. You grab a fistful, throw it down her throat, and whatever sticks is the right dose.” In all likelihood, the reason for the wish to explain Tylenol is not that there is any actual benefit in doing so—but because they want to create the faulty impression that they do provide additional value compared to e.g. a drugstore (which, unfortunately, is not allowed to sell even Tylenol).

*Drugs are usually sold pre-packaged in Germany, unlike the apparent (going by TV) U.S. system of each purchase being individually dispensed into small bottles by the pharmacy worker. (Incidentally giving another reason why the case for considerable qualification might be overstated. Most of what happens at and around the counter requires no skills more demanding than at many non-pharmacy counters—staff the counters with non-specialists and keep the specialists for tasks requiring specialist skills.)

Sure, when it comes to more dangerous or unusual medicines and e.g. the elderly, some advice might be beneficial, but is there any guarantee that what is said in the pharmacy is even remembered later? (Especially, with the elderly…) Is there any guarantee that the information given is actually correct, when we leave the area of Tylenol? I would certainly trust the written instructions by the manufacturer over the memory of a pharmacy worker. (Especially, with more dangerous or unusual medicines…)

And, no, I do not* want a pharmacy worker to give me something other than what the physician prescribed. Even if we assume that the pharmacy worker knows the drug side better than the physician (unlikely, when not an actual pharmacist; and not a given even for a pharmacist, especially when the physician is a specialist), the reverse will apply to the patient and his problem. This the more so, the more dangerous the problem and/or drug is.

*Apart from apparent errors and quackery (cf. above), and even here I would not just take the pharmacy workers word for it—I would check back with the physician. (And, obviously, apart from the special case of giving me the same drug with a different brand name.)

Finally, asking pharmacy workers for help, e.g. in lieu of going to a physician, is idiotic, because that just gives them an excuse to try to pawn off their homeopathic quackery or uselessly expensive products—see above.

Excursion on realtors vs. pharmacy workers:
In one case, I complain about too lax entry regulation; in the other, about too strict entry regulation. This is not a contradiction. Most notably, for realtors I speak of the entry criteria for a (possibly one-man) business, while for pharmacy workers I discuss the entry criteria for manning the counter in an existing business (run by someone with much higher qualifications, which I do not necessarily question). I would also consider a job as a realtor (even in employment) more demanding in terms of intelligence than as a counter clerk (even in a pharmacy). Further, there is nothing unusual with one “too much” and one “too little” being changed in opposite directions toward a “just right”—I do not, for instance, suggest that a realtor must have a topic-specific bachelor and two Staatsexamina*. (However, as a counter-point, most changes tend to have both positive and negative effects, and I do not rule out that there would be some negative effects accompanying the positive in both cases—but I do assume that the positive would be larger.)

*German official tests that must be passed by e.g. lawyers, physicians, and teachers before they are fully entitled to practice. Exactly what qualifications are reasonable I leave open, but something like an IHK (“chamber of commerce”) test to prove a reasonable knowledge of relevant law and regulation, accounting, construction, whatnot would be a possibility.

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Written by michaeleriksson

August 4, 2018 at 3:18 am

Some thoughts on a recent German controversies around athletes and freedom of action

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An incident around German/Turkish soccer star Mesut Özil* and Turkish President Erdoğan has caused immense controversy in Germany—and, in doing so, it illustrates some of the problems I have written about in the past, including the poor behavior of sports organizations and their disgraceful treatment of athletes (cf. e.g. [1], [2]); intolerance against unpopular opinion, especially by the press (cf. e.g. [3], [4], [5]); undue accusations of racism (cf. e.g. [6]); and at least an attempt at “who cries the loudest wins” ([7]). A triple hit (sports organizations, intolerance, racism) is provided by [8].

*Most information and all quotes are taken from this (German) Wikipedia page; some information stems from memory of the previous reporting or general knowledge.

Özil was born in Germany and is a German citizen; however, he is of Turkish descent, has a strong Turkish connection, and has had* a Turkish citizenship. He has on repeated occasions met with Erdoğan, the controversial Turkish President, without notable objections. However, a renewed meeting, including several other players with a similar background, in Mai 2018 lead to strong protests**:

*Having a dual citizenship as a German is usually not allowed. The two main exceptions are citizens of other EU states (which Turkey is not) and those still underage (which Özil no longer is). The latter must, unless otherwise exempt, make a choice which citizenship to keep when they do become of age.

**I am uncertain what the cause of this difference in reaction was. It might have been a symptom of the increasing Leftist and media intolerance, a change in perception of Erdoğan, a greater publicity due to the ongoing Turkish election campaign or the soon following World Cup, or that some aspects of the latest meeting were different.

Diesmal wurde Özil, ebenso wie Gündoğan, nach der Veröffentlichung von Fotos der Begegnung und dem Austausch mit dem türkischen Präsidenten teilweise scharf kritisiert. Die Trikotübergabe wurde als “geschmacklose Wahlkampfhilfe für Erdoğan” verstanden, beiden Nationalspielern warf man mangelndes “politisches Bewusstsein” vor. Die Aktion wurde als “Gegenteil von gelungener Integration” bezeichnet. Der Deutsche Fußball-Bund erklärte durch seinen Präsidenten Reinhard Grindel, man stünde “für Werte, die von Herrn Erdoğan nicht hinreichend beachtet werden.” Deshalb sei es nicht gut, dass sich Nationalspieler für dessen “Wahlkampfmanöver missbrauchen lassen. Der Integrationsarbeit des DFB haben unsere beiden Spieler mit dieser Aktion sicher nicht geholfen.”

Translation:

This time, Özil, just like Gündoğan [one of the other players] was partially sharply criticized after the publication of photos of the meeting and the exchange* with the Turkish President. [The handing over of one or more (sports uniform) shirts] was understood as “tasteless election campaigning for Erdoğan”, both national-team players were accused of a lacking “political consciousness”. The act was referred to as “the opposite of successful integration”. The German Soccer Association explained through its President Reinhard Grindel that it stood “for values, not sufficiently respected [considered?] by Mr. Erdoğan.” Because of this, it would not be good that national-team players allowed themselves to be abused for “his election tactics. The integration work of the DFB [the football association] has certainly not been helped by this act.”

*From context, likely the exchange of gifts. However, other interpretations are possible, including the interaction between them.

(Note that some typographical changes have been made to the original for technical reasons. The disputable placement of full-stops with regard to quotes present in the original has been preserved in both the original and the translation. Beware of the risk that the mixture of original quotes with text by Wikipedia editors can at some point have led to distortions compared to the full original quotes. Similar claims apply to other quotes below. )

There are quite a few problems with this*, most notably that Özil and Gündoğan should not lose their right to freedom of opinion** and action just because they happen to play for the national-team (or because they might be persons of public interest, idols of some teenagers, or similar). Such restrictions, barring exceptional cases***, are highly dubious when required by the press and inexcusable when by an organization like the DFB.****

*And note that this description (and my discussion of it) is just a sample: If this had been the totality, I might have been more forgiving. However, it is a sample highly compatible with what I have seen continually in other sources regarding Özil and/or the original events. (Unsurprisingly, there has been a lot of other discussions, including reactions-on-reactions, including by German and Turkish politicians, journalist, and athletes.)

**To boot, Özil denies that there was a political motivation or an act of political support involved (see also below). Whether this is true, I do not know; however, his claims are not obviously implausible. This would make the reactions against him even more inappropriate, be it because of being the more unfair or for being premature and having failed to discuss the matter appropriately in private before criticizing. (Which would have been reasonably possible for both members of the press and, above all, the DFB.)

***I am far from certain that such cases exist that do not at least touch upon the area of the illegal (e.g. explicitly calling for violence against Turkish dissidents). However, they might exist, and at least some of the above would be justifiable in another setting, e.g. the Pope chastising a member of Catholic clergy for appearing to support satanists.

****In as far as we speak of opinions, rather than sanctions or threats of sanctions, it could be argued that Grindel and/or the DFB equally has a right to speak his/its opinion. However, quite generally and including the press, there is a difference between an expression of opinion like (hypothetically) “I consider Erdoğan an idiot; ergo, Özil is an idiot for supporting him” and (what practically amounts to) “I consider Erdoğan an idiot; ergo, Özil has no right to support him”. Further, it can be disputed whether an organization like the DFB is even allowed to have an opinion in areas not relating to sport and its immediate business—and the implicit condemnation of Erdoğan is certainly not acceptable. Indeed, it amounts to the same sin that Özil is hypocritically accused of committing—with the critical difference that it actually is a sin when the DFB does it. Grindel, in turn, has the right to have his private opinion, but he must not presume to speak with the authority of the DFB if expressing this private opinion. To boot, people in positions like Grindel, unlike national-team players, are among the very few where I could contemplate an argument that they should hold back their private opinions, due to (a) the risk that these opinions are given undue weight by others, (b) the risk that others mistake private opinions of the individual for the opinions of the organization he leads or is a spokesman for—again making the accusations against Özil hypocritical.

More in detail, I note:

  1. The word “tasteless” (“geschmacklose”) is not compatible with a neutral discussion; “inappropriate” is an example of a neutral alternative.

    Whether this choice of word was merely careless, an unconscious sign of aversion, or deliberate rhetoric, I leave unstated; however, in a worst case, it could imply that such acts would have been allowed, had someone more “acceptable” than Erdoğan been involved—a thoroughly undemocratic attitude. (But not one that would shock me in light of my experiences with various Leftist groups. The same can apply elsewhere without explicit mention.)

  2. Even “inappropriate”, however, would have expressed a democratically dubious attitude, severely restricting the freedom of Özil on political issues.
  3. Athletes cannot be expected to be deep thinkers, intellectuals, whatnot to a higher degree than the average person. A lack of e.g. “political consciousness” (“politisches Bewusstsein”) cannot be a legitimate point of criticism unless the same is extended to the very many others who have the same deficit. To boot, this phrase is sufficiently vague that it is unclear what is meant, making the criticism harder yet to justify.* Worse, looking at the overall scope of the debate (not just the quoted Wikipedia passage), the most likely interpretation is a euphemistic way of saying “everyone who reads the paper knows that Erdoğan is evil; Özil obviously does not read the paper”.

    *In all fairness, this might have been different in the original context.

  4. The two claims about “integration” are misplaced, very hard to defend, and likely contributed to the character of Özil’s responses (discussed below). I note that integration can validly be a matter of behavior in society (and similar), possibly* even, to some degree, the adoption of certain value norms; however, it must not be extended to requiring adherence to whatever opinion corridor (cf. [5]) is currently popular. Further, the purpose of the DFB is not integration work; Özil has no duty to help them with whatever integration work they engage in; and it is not obvious to me how Özil might have done damage**. Indeed, it can even be disputed whether Özil, himself, has any reason to currently be well-integrated into Germany: He is a player for Arsenal; the Brits might have the more legitimate reason to require his conformance.

    *To me, it is more important to show (or not show) a certain behavior than to share the value norm behind that behavior. If nothing else, value norms change over time, even in a single country, regularly within a single generation, and it is important that value norms can be discussed and criticized. Also see e.g. [5]. Requiring a more than minimal value-norm conformance would deny immigrants rights of opinion that “old” citizens have.

    **If he did not, why would the DFB mention the topic? On the other hand, I could see how the behavior of the DFB and/or media might have damaged “integration”, e.g. through unnecessarily alienating some Turks or through lending them the impression that they are second-class (current or prospective) citizens.

    In addition, while it is true that many Turks remain poorly integrated even after the first generation, it is noteworthy that Özil is born in Germany, has lived most of his life in Germany, and went to school in Germany. Indeed, according to Wikipedia, even his father was two years old (the mother is not mentioned), when he came to Germany, making Özil a virtual third-generation immigrant. To, in this situation, lead with the assumption of poor integration is highly dubious, possibly genuinely indicative of prejudice; and it would be more reasonable to look e.g. at the personal character of Özil first and at “integration” only when this is insufficient. (By analogy, I do not reject, detest, deplore, and condemn the German “Karneval” because of any problems with my integration, but because of my and its respective character—as do quite a few natives.)

  5. To presume to criticize players or politicians (especially foreign* ones) for having or aiding “values” is not the job of the DFB, unless these are immediately relevant to its purpose. For instance, if a politician made statements favoring an increase of taxation for such organizations, a reduction of physical education in schools, or an outright ban of a sport or parts of that sport**, then that is a matter that the organization could legitimately speak on. Even here, however, a factual approach and factual arguments should be assumed: To say “If this tax increase is implemented, we will be forced to considerable reductions in our activities, including youth sports.” is quite OK; to say “X is a sports-hating idiot!” is not.

    *While being from another country, culture, religion, or time cannot e.g. make an unjust act just, it can change how the actor should reasonably be treated and viewed, because the degree to which he has been acting in good or bad faith, in conformance with his upbringing and societal norms, whatnot, can change correspondingly. It can also sometimes reveal a presumed-to-be-unjust act as just, e.g. because the circumstances are that different or because the presumed victim considered the act just; and it can easily reveal a presumed-to-be-illegal act as legal, because the laws in different countries and at different times can vary considerably.

    **For instance, Sweden long had a ban on professional boxing.

    The press should obviously have more lee-way (if in doubt, to protect the freedom of the press). However, I do note my suggestions for a new press ethics, and my strong belief that the press should report facts and leave the formation of opinion to the readers—not shove its own opinion down their throats. The more so, seeing how often this would amount to the blind presuming to lead the seeing.

  6. The use of “abuse” is doubly unfortunate, because it paints Özil et co. as patsies and Erdoğan as maliciously plotting in a manner that is both speculative and rude.

A point where some criticism might have been valid is concerning the disposition of shirts, e.g. depending on what team (national?, club?, other?) they belonged to, whether they were private property or team property, whether they were “official” shirts or shirts bought privately from a fan shop (merely using the same look as the official shirts), etc. However, if this criticism has been raised at all, it has not been one of the major points and it has no major effect on the above analysis. (For which reason I have not bothered to find out the details about the shirts.)

If I had been in Özil’s shoes, I would have been deeply angered over this criticism and I would not have hesitated to stand-up for my position. Gratifyingly*, Özil did exactly that. Less gratifyingly, he did so by resorting to counter-accusations of racism.

*Indeed, in [8] I call for exactly this willingness to take a stand.

Özil erklärte am 22. Juli 2018 auf dem Kurznachrichtendienst Twitter auf Englisch: “Ich bin in Deutschland aufgewachsen, aber meine Familie ist stark in der Türkei verwurzelt. Ich habe zwei Herzen, ein deutsches und ein türkisches. In meiner Kindheit hat mir meine Mutter beigebracht, immer respektvoll zu sein und nie zu vergessen, wo ich herkomme – an diese Werte denke ich bis heute”. Für ihn sei es bei dem Treffen weder um Politik noch um Wahlen gegangen. Ferner warf Özil einigen Medien vor, sein Foto mit Präsident Erdoğan als rechte Propaganda zu benutzen, um ihre politische Sache voranzutreiben. Weiterhin erklärte er, “nicht mehr für Deutschland auf internationaler Ebene spielen” zu wollen, solange er “dieses Gefühl von Rassismus und Respektlosigkeit verspüre”. Er forderte DFB-Präsident Grindel zum Rücktritt auf, weil Grindel unfähig sei.

Translation:

On July 22nd, 2018, Özil declared on the [short-message service*] Twitter, in English**: “I have grown up in Germany, but my family is strongly rooted in Turkey. I have two hearts, a German and a Turkish. In my childhood, my mother taught me to always be respectful and to never forget from where I come—values that I think of even today”. For him, the meeting was neither a matter of politics, nor of elections. Further, Özil accused some media [services/sources/…] of using his photo with President Erdoğan as Rightist propaganda, to further their political causes. Further, he declared, wanting “no longer to play internationally for Germany”, as long as he “sensed this feeling of racism and lack of respect”. He urged DFB-President Grindel to resign, because Grindel was incompetent.

*A somewhat literal translation of “Kurznachrichtendienst”. I am not aware of a corresponding English word, nor do I consider it likely that an English text would have used one: This type of largely unnecessary attempts at overly abstracted classifications and pseudo-explanations is a specialty of Germany. To boot, the word is very unfortunate, because incorrect assumptions of word division could lead to great misunderstandings: “Nachrichtendienst” is roughly “intelligence agency” (but here the appearance of this character sequence is just a coincidence).

**I have translated the German text back into English, and could possibly deviate from the original in detail. This sub-optimal procedure was partly used because the mixture of Wikipedia text and original quote might make it hard to identify the exactly corresponding statements; partly because I very deliberately have blocked Internet access to sites like Twitter, Facebook, etc. to avoid unethical tracking of my activities. For a text of this length, under these circumstances, it is faster to simply translate, probably (!) even when counting this explanation.

His justification* makes great sense, especially when combined with another source (some weeks ago), where I believe I read a statement that it was less a matter of meeting Erdoğan (as a person) than a matter of meeting the Turkish President (as a symbol or as the holder of the office). Consider, in the same line, if he had been of U.S. descent instead of Turkish: Would it be remarkable if he took the opportunity to meet with the current U.S. President or cherished an acquaintance with him going beyond a single meet-and-greet? He might or might not have had a preference for Trump or Hillary—but most people in his shoes would likely have taken either.** This even when there are other people who have an extremely low opinion of one of them (as with me and Hillary).

*But I remain at my position that he had done nothing that required a justification, this being merely an issue of averting unjustified criticism.

**In all fairness, I belong to those who might have turned down both.

I am highly skeptical towards the racism angle, however, in light of the strong left-lean of Germany media, what I have read on the Özil-controversy to date, and the common abuse of the accusation of racism for purposes like discrediting opponents. An anti-Erdoğan sentiment is a far more likely explanation for these reactions, and he would have been far better off having combined his justification of the meeting with a few choice word on freedom of opinion and the need to respect the choices of others—as would society: In this case, he would have helped point the way towards a more reasoned and tolerant debate climate; as is, he worsened it through too weakly supported accusations. (In his defense, he is a soccer player—not an intellectual. The situation might also have been different, had he e.g. spoken only of the DFB or Grindel, where he could very well have had insider knowledge of importance.)

I am not certain that Grindel must resign, but a retraction and an apology would be the minimum: His actions in this issue have done more harm than good, he has proven to be a part of the intolerance problem of modern society, and he has further proven himself to be a part of the problem with athletes’ rights vs. their organizations. I can also understand how Özil, personally hit by his behavior, would see his resignation as necessary. I might even, in his shoes, have demanded a resignation to emphasize the strength of my protests and to try to make clear that the Left and the PC crowd are not the only sources of dissatisfaction and that it is dangerous to just fold for their loud cries (cf. [7]). (Whether he is incompetent, as claimed by Özil, I cannot judge beyond what is implied through his actions in this issue.)

Finally, the DFB has in turn rejected any accusation of racism in a very blanket manner and said e.g. “Die Abrechnung von Mesut Özil schießt aber über jedes nachvollziehbare Maß hinaus und lässt keinerlei Selbstkritik erkennen.” (“However, the reckoning* by Mesut Özil shots over any understandable measure [sic!**] and reveals no sign of self-criticism*** whatsoever.”)

*This, in approximately the sense used in “there will be a reckoning”, is a reasonable translation of both the literal and metaphoric senses of “Abrechnung”. However, the English version likely comes across as more drastic than the German.

**The weird mixed metaphor is present in the original and is idiomatically freakish even in German. Something like “Özils Antworten gehen zu weit und mangeln an Selbstkritik” (“Özil’s answers go to far and lack in self-criticism”), would have been a far better formulation.

***“self-perspective” or similar might be closer in intended meaning.

While I agree that the accusations of racism are over-blown, Özil’s general negative reaction is justified. I see no obvious reason to fault him for too little self-criticism (there has been no* proof that he has done anything wrong!); while the reaction by the DFB hints that it lacks in the corresponding quality. Further, I must make the depressing observation that many an athlete has been accused of e.g. racism on similarly flimsy grounds—and, in those cases, it has typically ended either with the athlete being forced to offer an “apology” or the athlete being sanctioned. This up to and including a refusal to participate in global championships! (And despite it being highly, highly dubious to exclude even a genuine racist from competition based on opinion. If nothing else, absent even the slightest shred of sympathy for the rights of the offending athlete, even the most fanatical anti-racist must recognize that the absence of competitors devalues the event and the accomplishment of the eventual winner.) A similar case is present in [8], although involving a trainer rather than an athlete.

*Barring something that has gone past me during a more than two-months controversy that I have only followed casually. If so, it is not mentioned in Wikipedia either.

Excursion on my opinions of Erdoğan:
In light of my experiences with the PC crowd, I stress that I do not defend (or accuse) Erdoğan. The above deals with societal issues based on an example that happens to tangentially involve him—no more, no less. From what I have seen so far, Erdoğan is problematic, possibly highly problematic, in terms of e.g. his approach to topics like democracy and human rights, and chances are that Turkey would be better off without him. On the other hand, my knowledge of the overall Turkish situation is shallow, and I would not condemn him wholesale before having done considerably more research, especially as his position and actions might have been exaggerated or misrepresented in German media (which would by no means be a unique event). To boot, it is not a given that he is the “greater evil”: Looking e.g. at the rise of ISIS in the power vacuum left by the Saddam Hussein (an indisputable dictator with countless lives on his hands, and whose demise I whole-heartedly welcomed), keeping Hussein might have been the lesser evil…

Excursion on hate speech:
It might be interesting to compare the above with my recent discussions of hate speech, both with regard to how hate-speech accusers often proceeded and how my interpretation was more forgiving in those cases.

While I do say that there have been a number of statements made that have been e.g. wrong, rude, or propagandistic, I do not: Accuse any of the parties of hate speech; call for legal bans on anything said or done;* claim that others must censor them for the good of society; or call for anyone to self-censor**. This is very much unlike a typical hate-speech accuser.

*But note that specifically the collectors of the examples did not necessarily imply such demands.

**With the single exception that the DFB and its representatives should stay out of certain issues—and this exception for reasons that do not relate to whether the statements are right or wrong, or worthy of condemnation in and by themselves; rather that it would be, in some sense, an abuse of its role to enter these issues with any opinion. Cf. an excursion in [8].

Also note that when I see an interpretation as merely probable above, I try to take the trouble to actually speak of a “probable” (or similar) interpretation—I have an awareness that my interpretation could be faulty. (But I do not rule out that I, on occasion, have been or will be unintentionally careless in this regard.) In contrast, hate-speech accusers tend to jump to the worst possible interpretation and take it as the only possible interpretation.

When we now look at how “forgiving” my interpretations are, there are three underlying differences: Firstly, above I argue a “lesser crime” than the collectors did—the question is not one of “hate speech: yes or no?”, but of whether the speech can be considered fair and correct. Secondly, I have more context available than in most of their examples, making the room for ambiguity and misinterpretation smaller (and some other issues, notably a preceding Hebrew–English translation, are irrelevant, which also reduces the risk of misinterpretation). Thirdly, their examples should be seen in light of their own obvious hostility, including risks like cherry-picking, removal of exculpating context, or even malicious distortion.* (While I am not infallible, I at least try to be neutral.)

*Notably, if they had had more incriminating information to provide (e.g. a damning situational context or surrounding statements that would have made a more negative interpretation likelier), it is reasonable to assume that they would have included it. Because they did not, the likelihood of more negative interpretations is reduced.

Written by michaeleriksson

July 27, 2018 at 1:00 pm

More on Elster and Steuernummer

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And further problems with that inexcusable piece-of-shit tool Elster and the idiotic Steuernummer:

Being on a sabbatical, I knew that I would see no additional income and not that much expense after April. In other words, I should have been able to dispense with the monthly preliminary VAT declaration, file a blanket “0”, and make any corrections with the final yearly declaration. In effect, I should have been able to log into Elster once, in early May*, file my April VAT and give the preliminary “0” for the rest of the year—and then be able to forget about Elster until it was time for the main tax declaration.

*The declaration has to be submitted on or before the 10th of the following month. This, notably, even if the declaration amounts to “no VAT”.

Alas, no: Early May, I had not yet received my new Steuernummer (cf. [1] for terminology and problems around this misconceived identifier), despite having notified the “IRS” about my move well in advance. I decided to wait with the rest of the year until early June, being aware of complications of jurisdiction that had delayed the process, and fearing that a pre-filing using the old Steuernummer would lead to more problems than benefit (e.g. in that the IRS would ignore these, impose further entirely illegitimate fees*, and cause me hours of work to remedy that).

*I have a text in planning detailing some absolute outrageous, inexcusable misbehavior of the IRS in the course of this year, where I will go into this. For now, I am awaiting the eventual results of my complaints, before I write that text. Short form: The IRS ignores my explicit communications, e.g. concerning “SEPA-Lastschriften”, and then blames me for the consequences of its own negligence.

Alas, again: Early June, I had still not received the new Steuernummer, moving me to wait yet another month and increasing the single planned Elster session (May) to three (May, June, July).

Alas, again: While I did receive the new Steuernummer before early July, other events will force me to add at least one other session, now making it four (!), where it should have been one… To boot, my experiences demonstrated further problems with the inexcusable Elster interface (also see e.g. [2], [3], [4], [5]).

Specifically, as I logged in today:

I opened the form for the preliminary VAT declaration, used the data-import function with the May form as a source, and tried to correct the Steuernummer. First oddity: The first component of the Steuernummer given to me was “5131”—but the form only accepted a three-digit first component. After a comparison with the old value, I suspected that the leading “5” was a Bundesland (“state”) identifier, and that I was supposed to enter just the “131”, having already made a drop-down selection of the Bundesland. (This worked: Based on changes in the display, I could also deduce that “131” identifies the Finanzamt Wuppertal, confirming some of my speculations in [1] about idiocies in the Steuernummer.) This is absurd: Steuernummer should obviously always be communicated, entered, whatnot, in an consistent manner. If the full number requires a leading “5”, then the leading “5” should be allowed in the form, either without a manual selection of Bundesland* or with a consistency check between the two.

*Knowing the extreme incompetence of the IRS, I suspect that there is another problem with the Steuernummer, it self, that prevents this: The format of the number could conceivably still be slightly different in different Bundesländer… (Also see [1].)

Done with that, on to the rest: I opened a new form, and now tried to do a data import based on the declaration I had just submitted for June—only to find that it was not yet listed (possibly, due to some entirely unnecessary delay somewhere). Because I did not want to have to manually enter the new Steuernummer again and again, I now went into the “profile” section of Elster (an alternative source of data), seeing that I would have to make changes there anyway—and, no, Elster and/or the IRS is not smart enough to actually automatically provide the new Steuernummer electronically.

In a first step, I opted to create a second profile, so that I could have the old data, including Steuernummer, available in Elster it self—and was met with a form without any previous data or ability to import data, having to manually add (obviously unchanged) values for my name and Identifikationsnummer* (cf. [1]), as well as the address and whatnot. (Note that while the “address and whatnot” could have changed, the old values should still have been taken over as defaults.)

*In [1], I claim that Elster does not store it. Here I was obviously wrong. However, (a) most forms in Elster make no mention of it and has no field where it could be manually or automatically altered, (b) I know for sure that I have had to enter it manually at some point in the yearly tax declaration, implying that there at least was some time when the entry in the profile had no practical effect. (Whether this is still the case, I will find out when I do the tax declaration for 2017.)

Wishing to keep my effort down, I went back to the profile listing and instead opted to edit the old profile—and was promptly met with an error message that it was not possible to have two profile-editing sessions in parallel… Amateurs!* I now discarded the first editing session and altered the original profile—for the second time: I had already changed the address to reflect the Wuppertal address when I moved. Now I had to edit the profile again due to the changing Steuernummer—that only changed because I moved (cf. [1])! (More generally, since the change of the Steuernummer will always come with some delay relative the actual address change, the tax payer is put in the dilemma of either having to alter the data in the profile twice, or of having partially outdated data in the profile until a single unified alteration is made.)

*This might have been justifiable if the same profile was edited, but here we had two different profiles, the check apparently being tied to the form used—not the entity actually being altered. This points to either an amateurish way of checking for potentially dangerous editing or an amateurish way of implementing the forms (e.g. in that using the same form simultaneously on two entities could cause data pollution, with the developers preferring to ban parallel use rather than correcting the forms).

All said and done, I went back to my VAT declarations. After a new complaint that I had two editing sessions open (this time for VAT; WTF!), I discarded the old form, and started anew in a pristine one. I tried a data import with my profile as source, but, lo and behold, the !!!OLD!!! Steuernummer was still inserted! (At which juncture I gave up. Let us see what happens in early August…)

It is as if these idiots deliberately try to maximize both the amount of work for the tax payer and the risk that he accidentally does something wrong (e.g. through not noticing that the wrong Steuernummer has been automatically added by Elster).

Written by michaeleriksson

July 7, 2018 at 4:35 pm

German World-Cup debacle / Follow-up: Poor decision making

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As I wrote recently concerning the World-Cup game between Sweden and Germany:

As can be seen, the correct decision/the ideal outcome of the game cannot be determined without information that is not knowable at this time. In effect, this game is “unrootable” for me, and the interesting events will largely take place in the respective last of the three games each team plays.

(What is the most likely scenario? Well, on paper Germany is a clear favorite against Sweden, and will likely end up second in the group, behind Mexico, while Sweden and South-Korea are eliminated. How it plays out in real life is yet to be seen.)

By now I am left almost shocked: Germany very, very barely defeated the Swedes, on overtime—but…

…Sweden won the group and Germany ended up last(!), something almost inconceivable before the tournament.*

*Germany is not only the defending champion, but also came of a long line of good results (until the last few preparation games, where things started to fall apart).

That Sweden, in today’s third round, could beat Mexico was not entirely unexpected, after the two teams having similar showings against Germany* and South-Korea; however, the 3–0 was highly surprising. Germany, in turn, should have beaten South-Korea, and that would have made the dream scenario of both “my” teams advancing come true—a scenario that seemed quite unlikely after the initial German failure against Mexico. Unfortunately, Germany continued a trend of not actually scoring, even being the superior team in terms of play; the result at 90 minutes was 0–0; and during the desperate** German attacks during stoppage time, South-Korea scored twice…

*While Mexico won, it was mostly a matter of luck; while Sweden lost, it was on a last minute action during stoppage time.

**Even a one goal victory, given the Sweden–Mexico result, would have been enough for advancement; any non-victory implied non-advancement.

This leaves us with an absurd situation, with Germany trailing even South-Korea and having the likely worst result in its World-Cup history—despite beating the eventual group winner and despite being the better team in all three of its matches.

As for Sweden, I note that it has now been part of the elimination of three supposedly strong teams: After beating out the Netherlands (2014/“reigning” World-Cup third-placer) for second place in its qualification group, multiple champion Italy was beaten in a play-off, and now reigning champion Germany is gone too. (Although, admittedly, Sweden was the only team not to beat the Germans…)

An interesting observation is that Sweden has mounted reasonably successful teams before and after the national-team career of Zlatan, but not during it. Unlike some other greats, he never really delivered in the national team, and the depth behind him appears to have been lower than before and after.

Written by michaeleriksson

June 27, 2018 at 5:39 pm

Follow-up: Poor decision making

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Sometimes it is impossible to make a good decision, even with a sound attitude and complete knowledge of the knowable facts. My current dilemma regarding the FIFA World Cup is a good example*:

*Except in as far as following sports and/or basing team favoritism on factors like nationality can be considered irrational: I could always decide to not care at all…

My native Sweden and my adopted Germany are in the same group and will presently play each other. Which team should I root for?

In the four-team group with two teams advancing, the ideal would be that both “my” teams advance. However, this is tricky: Germany unexpectedly* lost against Mexico, while Sweden expectedly won against South-Korea. Should Mexico (as expected) win against South-Korea**, the only way to get both teams in would be for Germany to win both its remaining matches (including against Sweden), Sweden to win against Mexico, and having the goal difference play out fortunately between the three 6-point teams. More likely, considering the presumed weakness of the South-Koreans, one of the teams will make it and the other fail.

*In such statements, I go by the official seeding, which had Germany 1st, Mexico 2nd, Sweden 3rd, and South-Korea 4th.

**The match was completed during my writing: Mexico did win.

In that scenario, however, which team would I rather see advancing? Sweden is a little bit closer to my heart, but Germany has a far better chance at being successful in the knock-out phase. What if Sweden were to advance, only to lose immediately in the next first knock-out round?

Also, if Sweden* is the team that advances, it would beneficial to be the group victor. For that to happen, a loss against Germany would be very problematic. On the other hand, if Sweden were to beat Germany, the dream scenario of both teams advancing is pretty much ruled out. A draw is not that good either, because it (a) means that only two points (instead of three for a victory) are awarded, (b) could lead to Sweden simultaneously missing the group victory and Germany being eliminated.

*Ditto for Germany, but their chances of a group victory are currently smaller.

Then again, should South-Korea upset Mexico, we have a completely different set of scenarios to look into.

As can be seen, the correct decision/the ideal outcome of the game cannot be determined without information that is not knowable at this time. In effect, this game is “unrootable” for me, and the interesting events will largely take place in the respective last of the three games each team plays.

(What is the most likely scenario? Well, on paper Germany is a clear favorite against Sweden, and will likely end up second in the group, behind Mexico, while Sweden and South-Korea are eliminated. How it plays out in real life is yet to be seen.)

Written by michaeleriksson

June 23, 2018 at 7:13 pm

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.

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