Debunking the Myth of Germany’s Enormous Tax Literature Production

Challenging the Myth: Dissecting the Complexity of German Tax Law

Introduction

The complexity of German tax law has been a subject of widespread discussion, with claims suggesting that it constitutes a significant portion of the global body of tax literature. These assertions have been repeated in various reputable publications, including newspapers and magazines. However, the validity of such claims has remained largely unsubstantiated.

Genesis of the Myth

The notion of German tax law’s excessive complexity first gained prominence in 2009 when Guido Westerwelle, then leader of the Free Democratic Party (FDP), stated in a Bundestag speech that 80-90% of the world’s tax literature originated from Germany. This bold claim lacked any supporting evidence and has since been widely circulated without proper scrutiny.

Investigating the Truth

In 2011, two economists from the University of Tübingen, Franz Wagner and Susanne Zeller, embarked on a rigorous investigation to unravel the truth behind this persistent myth. Their findings, published in the prestigious journal "Finanzarchiv," shed new light on the issue.

Key Findings

Wagner and Zeller’s research revealed that the widely-cited figures were grossly exaggerated:

1. Percentage of Global Tax Literature: Their analysis showed that German tax law accounted for only around 7% of the global tax literature, a far cry from the 80-90% claim. This percentage was comparable to the contributions of other major industrialized countries such as the United States, France, and the United Kingdom.

2. Length of Tax Codes: The researchers also examined the length of tax codes in various countries. Contrary to the perception of German tax law being exceptionally voluminous, they found that Germany’s tax code ranked only in the middle of the pack among developed nations.

3. Complexity of Tax Laws: Wagner and Zeller’s study further assessed the complexity of tax laws using various metrics, including the number of tax provisions and the frequency of changes. They found that German tax law did indeed exhibit a degree of complexity, but it was not significantly higher than that of other countries.

Implications

The findings of Wagner and Zeller’s research have important implications for the perception of German tax law:

1. Exaggerated Complexity: The myth of overwhelming complexity has been debunked, highlighting the need for a more nuanced understanding of German tax law. While it presents challenges, its complexity is not out of line with other developed countries.

2. International Perspective: The study underscores the importance of comparing tax systems across borders to provide a comprehensive view of their relative complexity. Relying solely on anecdotal evidence or outdated information can lead to distorted perceptions.

3. Policy Implications: The findings suggest that policymakers should focus on addressing specific areas of complexity within German tax law rather than pursuing wholesale simplifications that may prove ineffective.

Conclusion

The claim that German tax law constitutes a disproportionate share of global tax literature is a myth that has been perpetuated without proper evidence. The research of Wagner and Zeller provides a more accurate assessment, demonstrating that German tax law is comparable to that of other developed countries in terms of length and complexity. While challenges remain, policymakers should approach tax reform with a balanced and evidence-based perspective, focusing on specific areas of improvement rather than relying on exaggerated claims.