Tax Exile Sports Idols Face Political Wrath | Business| Economy and finance news from a German perspective | DW | 28.11.2003
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Tax Exile Sports Idols Face Political Wrath

Germany's multi-millionaire sports personalities have come under fire from their own government. It claims that those who live in tax havens are "unpatriotic" at a time when the economy could do with their euros.


"You want us to pay how much?"

Germany’s standing as a sporting nation in the world has been built on the success and high profile nature of the home-grown stars that have excelled in their fields under the red, black and gold flag. From soccer to skating, racing to running, Germans are there or thereabouts when it comes to helping themselves to the silverware.

But despite the accolades and the respect that the country’s sports stars have brought to their nation, many now find themselves in the firing line of angry politicians who are branding them “unpatriotic” and “anti-social,” among other insults. These enraged politicians believe that many of the most successful German sportsmen and women have taken much from the country in terms of financial investment but have personally chosen not to give anything back. In short, it’s a question of tax.

Success outweighed fiscal loss

In recent times, those sporting idols who moved abroad to escape Germany’s high tax rates were long immune to criticism. Their contribution to global sport far outweighed the fiscal loss, people thought. What sports stars brought to Germany in terms of prestige dwarfed the fact that their millions sat in foreign tax havens, accumulating interest.

Franz Beckenbauer

Franz Beckenbauer: Der Kaiser of Austria.

It now seems that the days of the blind eye are over. While dwindling German tax revenues are forcing the government into making unpopular spending and pension cuts, the lucrative exile of heroes such as soccer monarch Franz Beckenbauer (picture), cycling star Jan Ullrich, tennis icons Boris Becker and Michael Stich and the racing Schumacher brothers has come under new scrutiny.

When once it was almost taboo to bring up the subject of tax in the same breath as the name of “Der Kaiser,” “Boom Boom” or “Schumi,” high profile political figures are now venturing into unknown territory by attacking these untouchables for abandoning their homeland and taking their much needed cash with them.

Eichel makes a stand

Finance Minister Hans Eichel was among the first into the fray last month when he criticized the cream of Germany’s sporting heroes on a television talk show. “I’m not among the fans of people like Boris Becker, Michael Schumacher and Franz Beckenbauer,” Eichel said in an attack on those who have moved to Switzerland and Austria, where taxes are lower.

Schröder gestikuliert auf dem SPD- Sonderparteitag zur Agenda 2010

Show me the money!

German Chancellor Gerhard Schröder, who is proud of his country’s sporting history, recently criticized the same people who have often received personal congratulations from him on their successes. During a meeting of his Social Democratic Party (SPD) in October, the reform-obsessed Schröder turned on the tax exiles. “Our problem is neither the economic reforms we’re making nor the tax levels we have but rather what tax is actually paid here and not carted off into Switzerland or Luxembourg,” the chancellor told applauding party members.

Anti-social behavior

Other Social Democrats have also added their ire to the gathering condemnation. “It’s unpatriotic of these people taking full advantage of the possibilities of our country all their lives but then shoveling their money into Switzerland or Liechtenstein,” Sigmar Gabriel, a former premier of the German state of Lower Saxony, told German broadcaster N-TV. “I even consider that behavior anti-social,” he added.

Caught up in the growing wave of disgust, Reinhard Bütikofer, co-leader of the Green party which shares power with Schröder’s SPD, even went so far as to suggest stripping those who enjoy other nations’ tax breaks of their German citizenship. “Those who don’t want to pay (German) tax can give up their German passports,” Bütikofer said.

Plans to cut income tax rate

However, while slapping the wrists of the wealthy sports idols with one hand, the German government seems intent on coaxing them back home with the other. Germany’s top income tax rate is currently 48.5 percent, down from 51 percent in 2000. But now Schröder and his penny-pinchers are planning to cut that rate again next year to 42 percent, partly in the hope that wealthy Germans will stay at home or return to more favorable financial conditions.

Boris Becker Steuerprozess in München

Boris Becker has had a taxing time.

It may be too much to expect a permanent return from Boris Becker, who was badly burned last year when a Munich court convicted him of tax evasion and ordered him to pay a €600,000 ($714,000) fine. It was the second time Becker had been caught after paying €3 million ($3.6 million) in back taxes earlier in his career for living in Munich while claiming tax-haven Monaco as his residence. “I came back to Germany voluntarily in 1994 and have paid more than €25 million ($29.7 million) in taxes since then,” Becker said. “For that, I’ve got a kick in the rear end.”

It is also unlikely that the other stars named by the politicians will be in any hurry to return home to face German tax bills.

Stars established abroad

World Cup winning captain and coach Beckenbauer will be quite content to continue living just south of the German border in Austria where he has been a resident for decades. Fellow cross-border dwellers such as former Wimbledon champion Michael Stich and champion speed skater Anni Friesinger are also happy to remain in Austria while former Tour de France champion Jan Ullrich has only just finished unpacking after he moved from the Black Forest to Switzerland last year.

As for the racing Schumacher brothers, the latest outburst from the government cannot come as too much of a surprise, especially to Ralf. While his more successful and tactful brother Michael keeps a low profile on his Swiss farm, Baby Schumi has faced heated criticism since moving to Salzburg in Austria.

Taxation jungle

His cause was not helped by remarks he made last year which disparaged his home country. “Germany is simply a taxation jungle,” the younger Schumacher said. “I don’t feel like having tax collectors on my heels. I don’t want to be hunted down like Boris Becker or Steffi Graf. That’s why I used the chance to go abroad for tax reasons.”

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