Tax Law Threatens Germany’s Creative Classes

Published May 15, 2012 | By skrufff

Kreuzberg, Berlin

DJs and artists in Berlin will be amongst hundreds of thousands of self employed people who could soon be forced to pay €350 a month pension contributions on top of mandatory health care costs plus taxes meaning each will have to earn at least €600 before earning one cent.

“These mandatory contributions will be hundreds of euros per month for a basic social security which they can’t live on. For many freelancers, this could signal the end,” freelance news portal Deskmag.com predicted.

“From July 1st 2013, many self-employed workers risk enduring significant financial burdens that threaten their professional existence, especially for those who have inconsistent or precarious sources of income. The creative economy is likely to shrink as a result,” they suggested. (DeskMag.com: http://bit.ly/IJmMlJ )

Expat news portal columnist Seymour Gris of ExBerliner was similarly alarmed.

“In a new package of proposed laws beautifully entitled “Rewarding Life’s Work” planned by the Merkel government, the self-employed will be required to pay a monthly “retirement contribution” of around €350 to help fill up the coffers of the bankrupt German pension system which is already subsidized by €80 billion in taxpayer money beginning in 2013,” he said.

“Berlin is especially susceptible to this legislation, as it will kill off myriad microcosms of entrepreneurism in every imaginable field from culture to food to IT. Or else drive more small business people into the tax-free black market,” he predicted. (http://bit.ly/KmzHNp )

Brighton based freelancer and DJ/ promoter Nick Titchener also ridiculed the proposals branding them ‘ridiculous’.

“If a similar thing was brought into play in the UK, many, many freelancers wouldn’t be able to afford to eat, or pay their rent. Where do the lawmakers think the money is going to come from, especially for start-ups or those going through a bad time – as every “freelancer” or self-employed person does? Anonymous benefactors? Donations from big business?” said Nick.

“It will be a medium term nightmare for the German economy, particularly with mobility of labour in the EU; why would anyone start something up in German? You know those little innovative “we can start by building it in the garage” business like, say Apple or Microsoft . . .”