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Business

Opinion: Wealthy Tax Evaders Should Fess Up

Germany's other affluent tax evaders should avoid the fate of Deutsche Post CEO Klaus Zumwinkel and turn themselves in to authorities, said DW's Karl Zawadzky. Otherwise, things could get ugly.

Opinion

The resignation serves as a confession: Klaus Zumwinkel realized that he could not remain CEO of one of Germany's largest companies and decided to face the consequences. He didn't have a choice.

It goes without saying that he has to give up his position at the top if he funneled money into Liechtenstein's tax paradise and didn't report the interest he'd earned. It's called tax evasion.

Karl Zawadzky

Technically, he's considered innocent until found guilty in a court of law or until he has made a formal confession, but it's becoming more and more apparent that the evidence collected so far is just the tip of the iceberg.

Post chief is one of many

Several hundred wealthy Germans, some of them celebrities, have also invested money in Liechtenstein and hidden it from the German tax authorities. Now they have a big problem, too.

Klaus Zumwinkel himself became the tip of the iceberg when the other tax evaders came under the radar of the public prosecutor's office. The Alpine principality's tax saving model is not quite as secure as many had thought. The secrets at the large baronial bank have been cracked and officials have known for months who has money there and how much -- including in the so-called family endowments.

Now the investigations have begun. Over the next few weeks, police and public prosecutors will pay visits to many of the tax evaders. Zumwinkel is merely the first of many.

Sympathy is not in order. We're not talking about the poorest of the poor but mainly about people who, even after properly paying their taxes, could still afford a hot lunch.

Greed conquered reason

Zumwinkel isn't the only one asking how it could come to this. The answer is simple: Greed was stronger than reason. Zumwinkel certainly didn't need to do what he did. As the head of Deutsche Post, he not only collected an annual salary of 3.5 million euros ($5.1 million) but had also inherited a large sum of money at a young age.

He would be wealthy even if he had paid the taxes he owed, just slightly less wealthy. That's also true of most of the others who will soon receive visits from the authorities. None of them is poor; rather they're among the richest members of society -- of the very society that made it possible for them to become as affluent as they are.

If they have any brains at all, they should come out of hiding as soon as possible. The German tax authorities aren't interested in punishment or even revenge -- they just want the tax money owed to them. That means that those who turn themselves in to the tax office and pay the missing taxes with interest before they're investigated will get off without penalty.

Fine is least of the worries

The tax evaders that don't do this will have to face the full rigor of the law -- and rightly so. It's always the wealthier part of society that complains about high taxes and takes advantage of every opportunity to reduce their own tax burden, either by legal means or illegally via Liechtenstein.

Zumwinkel's case -- and the many more cases that are likely to follow in the coming weeks -- shows what the outcome can be. His reputation is ruined, his job has been lost and a hefty penalty is looming. He and the others can consider themselves lucky if they get off with merely a fine and not a prison sentence.

Karl Zawadzky is DW-RADIO's business editor (kjb)

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