Tuesday, March 26, 2013

Give and take

Then forget the "take" part and turn victim.

Two German states filed a case with the country's supreme court on 25 March. The Bavarian press statement began very appropriately with a reference that made a lot of people uncomfortable: "Since 9 o'clock this morning, we've been in court."

If you are not a historian or not German, here is a hint: look up the radio announcement of the invasion of Poland in WWII.

What the case is about:
German states have a mechanism for transferring money from "rich" to "not so rich states", and the plaintiff states of Hesse and Bavaria say that they are paying inordinate amounts to poorer states.
The third big payer Baden Wuerttemberg chose not to join them in the case.

How it works:
Contrary to initial suspicion, this is not a leveling mechanism. Say, a rich states makes 12 dollars in taxes, a poor state makes 8, and the median for all is 10.
The rich state would give 1 dollar to the poor, helping the poor state but not giving up all the riches.

Bavaria and Hesse are pissed:
Especially because the vast majority of the money they pay in goes to the city of Berlin.

How much do they pay:
Bavaria, the biggest payer, pays about 3.5 billion Euros a year. Since that is not really a whole lot if you understand that the federal government paid more than twice that amount to bail out a single Bavarian bank a few years ago, they show charts with cumulative payments made since 1995.
That looks more impressive.

The end of history:
The really squeaky wheel Bavaria conveniently leaves out two facts from their narrative. Bavaria is newly rich -- they received huge sums after WWII through the financing model they now want overturned. Their solution: history begins in 1995.
In addition to the state level help, Bavaria was the one state that has received more money out of the federal budget than any other.

How it is justified:
Solidarity, sure, but a more justly distributed effort.

How it is widely perceived:
a) Earners - keepers
b) F*** everybody, never mind the 40 years of help, we deserved them more than anybody else.


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