
Germany’s dividend-stripping tax scandal - brakmic
http://www.zeit.de/wirtschaft/2017-06/cum-ex-scandal-tax-evasion-dividend-stripping-germany
======
Joe-Z
I don't get the number of people here commenting 'this isn't theft' and
they're just exploiting legal loopholes.

Yes, you may be able to justify this legally, but it is a morally highly
questionable behaviour nonetheless.

I mean jesus, aren't many people on here some kind of intellectual elite? And
these are the people that argue FOR the ones fucking over the general populace
for their personal gain?

This kind of shit has to stop and we should be the people stepping in for the
little man. Unless of course you dream of one day profitting from the same
anti-social tax-evasion bullshit.

~~~
bhaak
It's just this easy. If it's legal, it's not theft. I don't like that either
but that's how the law is.

I mean, apparently, it wasn't so bad. It only took them 20 years to make that
behavior illegal. They would certainly have been faster if it were bad.
/sarcasm

People will always try to game the system. But in this case, the politicians
failed to act properly after it was obvious that it didn't work out as
intended.

~~~
throwawaymanbot
I think its lazy to blame politicians for this. Its complex, highly complex,
financial horse trading. Its a loophole exploited. Thats probably far more
sophisticated than any politician can reasonably be expected to understand
deeply, let alone see the bigger destructive picture. (not to mention
lobbyists badgering and actively asking for legislation for "loopholes" like
this)

A Financial regulator/watchdog is to blame. And of course, Quelle Suprise,
lots of countries let the finance sector regulate themselves.

Which is silly, because there are no ethics involved with some of these
people. Just profits, at any cost.

~~~
pdimitar
Politicians should be experts in many things. Their job is (in the ideal
theoretical sense of our political systems) hard and very responsible. What
they hell are they doing with their time? Sit in endless pointless meetings?
Secret meetings with large business? Faking smiles 13 times a day? WHAT are
they doing exactly?

And then -- "we're too busy to know this stuff". In an ideal world such a
politician would fly far away from office immediately, and all the people who
benefitted from that would have to return the gained money from the loopholes,
or live in cozy conditions in the jail. One can dream, right?

So, _what_ are the politicians supposed to know? How to bullshit the general
populace on TV?

------
lordnacho
While I do think the rules should be fixed, I don't think it's fair to call it
theft. They do have lawyers to make sure it's legal.

There are desks at banks whose entire reason for existence it tax arbitrage.
It's not really a great use of people's education and time, but it's real and
it's legal. I don't know the specifics of how it's done, but I do know these
desks exist.

There was another case in Denmark where the tax department basically neglected
to check that the claimants actually owned the shares and just sent them a
huge amount of withheld dividend tax.

The underlying issue is that the rules can be gamed, but only by entities who
can pay for the professionals who understand them. There's gotta be a smarter
way to arrange the tax system.

~~~
verinus
There is something in Law that is the sprit of the law and if you use
loopholes you clearly understand the intent of the law and decide to abuse it
for you personal gain- and I think of this as theft...

------
runj__
The very first number is incorrect isn't it?

€3,100,000,000 != 31.8 billion

~~~
VMG
Maybe related to
[https://en.wikipedia.org/wiki/Long_and_short_scales](https://en.wikipedia.org/wiki/Long_and_short_scales)

~~~
beaconstudios
it's actually due to a missing 0 and a misplaced comma.

------
philipps
Great long-form reporting about the case in German (minus gifs) >
[http://www.zeit.de/2017/24/cum-ex-steuerbetrug-
steuererstatt...](http://www.zeit.de/2017/24/cum-ex-steuerbetrug-
steuererstattungen-ermittlungen/komplettansicht)

------
mcv
I'd like to read the article, but instead I constantly get big animations all
over the screen. Very distracting. Apparently this is a frivolous topic rather
than something serious?

~~~
hrktb
This should have been an animated video with the explanation narrated. They
did 90% of the work, just needs someone for the voice over.

~~~
marcosdumay
Yeah. I still managed to read the english part. Painfully and slowly, and only
because the subject looked really interesting. If they just added a voice over
and changed the format they would finally ensure that I wouldn't watch it,
what seems to be the goal.

------
smoyer
It's a small crime - the real crime is this web-site! These developers were
the same ones who thought combining <blink> and <marquee> was a good idea in
the '90s.

~~~
glenneroo
Not to mention the discrepancy in the first graphic (which clogged up the
screen with dropping money bags for 15 seconds):

> Total amount lost by the state due to the tricks: at least €3,100,000,000
> (31.8 billion)

So which is it? 3.1 billion or 31.8 billion? It's not a minor difference!

Also, does anyone else have extreme difficulty reading text while an animated
gif taking up 1/4th of the screen constantly loops? I usually scroll until the
gif is off-screen so that I can continue reading. In this case it's impossible
because there are multiple gifs per page so I can't scroll in any direction.

~~~
tveita
It now says "€31,800,000,000 (31.8 billion)", so presumably the latter.

------
VMG
> What the state could have done with €31.8 billion

If we start with these sorts of calculations, why not set the tax rate to
100%? Apparently the taxed populace doesn't ever do anything worthwhile with
their money.

~~~
kagamine
Remind me to overcharge you if ever I serve you in a shop. When you complain
that with that extra $n you have _done some thing_ , I'll point you back to
that comment.

~~~
VMG
I'm happy to enter into any voluntary transaction where the terms are decided
upfront and where I can decline to accept your offer.

------
bolololo12
Not a smaller scandal was former Polish Prime Minister Donald Tusk (now
President of the European Council) reform to move money saved on privately
owned pension accounts called OFE (OFE invested peoples money into obligations
and bonds) to the public pension system - circa 151 billion PLN, so around 40
billion USD.

link:
[http://www.money.pl/gospodarka/raporty/artykul/skok;na;pieni...](http://www.money.pl/gospodarka/raporty/artykul/skok;na;pieniadze;z;ofe;rzad;zabiera;nam;150;miliardow;zlotych,14,0,1375502.html)

~~~
bgarbiak
I don't want to start a political dispute over here, but the private pension
funds scheme is a theft by itself. The country transfers money over to these
pension funds, and by doing that it raises it's own debt. Now it has to sell
bonds to cover that debt. That bonds are being bought by the very same funds.
Country will have to buy them back, but with a loss. In the end: the profit on
that pension funds is, in fact, funded by the citizens themselves. The only
beneficiaries are the funds themselves, as they got the margins, and take a
some sickly huge commission.

In short: it was an unpopular but wise decision by the former Polish gov to
stop this scam. I believe that the current government is going further into
that direction. Also a good move.

~~~
bolololo12
government pension funds are not a smaller scam. Enough to say they constantly
raise the age at which you can start collecting your pensions and return you
small % before you die. So privately owned funds, even if they have massive
commissions, still return back more than the government.

The government introduced this type of investing in Poland in the reform in
1999 and in 2014 just didn't buy back obligations which were bought using
peoples money.

------
golergka
This article obscures the most important question you can have about this: was
it legal, or wasn't it?

You can have as many ethical systems as you want and call it "evil" or not
depending on your opinion. But you don't have multiple law systems (in a
single country) and call it "theft" or "legal loophole" depending on what mood
you're on. It's either one or another.

~~~
MagnumOpus
Yet to be determined I guess. Cum-ex wasn't explicitly mentioned as forbidden
between 1992 and 2011, cum-cum wasn't forbidden until 2016.

In my absolute layman's opinion cum-cum trickery might have been legal unless
forbidden, but cum-ex sounds more like fraud than exploiting loopholes - and
the state _has_ sued all the people and organisations involved starting from
2014 - looking for tax evasion and fraud convictions...

------
charlesdm
> BERLIN, June 22 German banks exploited a legal loophole that allowed two
> parties to claim ownership of the same shares, the financial watchdog will
> tell lawmakers this week, in schemes that could have cost the state billions
> of euros in tax over many years.

ZEIT: "The Multibillion Euro Theft". To call it theft then, is a bit
ridiculous. It was a loophole. There are loopholes everywhere. If lawmakers
would make proper laws (isn't that part of their responsibility?), and took
sufficient time to think them through, a lot less loopholes would exist.
Unless they're put there by design, of course.

~~~
jstanley
Most loopholes allow you simply to pay less tax than you might otherwise owe.

This loophole seemingly allows you to take back more than you paid in the
first place. This is theft.

~~~
charlesdm
Or a tax break. If you get an R&D cash subsidy from the government, is that
theft? If it's possible within the boundaries of the law, it isn't theft. It's
a design flaw (and one certain politicians should definitely be held
accountable for, for sure!)

~~~
stupidcar
No, no, no. Fuck that. I cannot understand this kind of sociopathic attitude
to morality, even on Hacker News. Theft is a social and moral concept. Right
and wrong are not defined purely by what's legal. The law is just a (flawed)
attempt to codify a society's moral consensus, not an excuse for individuals
or organisations to abdicate all personal moral judgement.

If a child in a nursery grabs away another child's juice box for themselves,
they haven't broken any law, but it's still theft. If an autocratic government
passes a law allowing it to seize the assets of a minority group, it's still
theft. If a bank exploits legal loopholes to take billions of taxpayer's
money, it's theft, regardless of whether it's legal.

------
atemerev
If theft is involuntary taking of other people's money, then tax is theft.
Employing every legal trick to minimize taxes is moral and encouraged.

~~~
ThomPete
Theft is defined by law so no Tax is not theft. There isn't an objective
definition of theft. No one owns anything by any other definition than what
society or the strongest define.

~~~
VMG
A person owns himself or herself. Slavery is immoral and wrong even where it
is legal or was legal.

~~~
ThomPete
No they dont own themself there is no such thing in nature as owning yourself.
It's something we have agreed upon over thousands of years but you don't
actually own yourself.

If you are the strongest you can stand for yourself but there is no natural
law that prevents someone from making you a slave of them.

~~~
throwawaymanbot
No ones saying that in the law of the jungle that isnt the case. It's
different rules there for sure. But thats why we have progressed to where we
are today.

Since We live in a western democratic civilization, and there are laws against
that very thing, I'm not sure what you are trying to say.

~~~
ThomPete
What I am saying is that the theft discussion is defined by society and the
laws of society. So you can't claim that Tax is theft.

~~~
VMG
Then neither is tax avoidance.

~~~
ThomPete
Not naturally no. Only be the law of society just like ownership is given by
society and doesn't exist "out there"

I was responding to a claim that tax is theft if theft is defined by
involuntarily giving something up.

