I see, that does change things. Thanks for explaining that -- it is quite different than in North America, where municipal taxes are generally added on top of provincial or federal taxes. For example, many wealthy NYC residents go to great extremes to avoid the municipal tax, which they can do by spending enough time out of the city [0].
I guess to the point of Berlin, do municipal taxes work the Estonian way or the North American way in Germany?
Basically all of Germany's taxation happens at the federal level. The taxes that happen at the municipality level are largely property taxes, can't really avoid that by moving around.
That's the spending side. Tax collection happens federally. As you can see
>"Das Ländersteueraufkommen stieg im Haushaltsjahr 2016 gegenüber dem Vorjahr erneut deutlich um 9,9 % auf 22,3 Mrd."
Only 22 billion of the 600 billion euros are collected at the regional level, about half of it is spent by regional administration. Given that OP was asking about the former and specifically avoidance, how the money is spend doesn't seem that relevant.
This is true, but there are still incentives to fake your residency. For example, you only have to pay the Rundfunkbeitrag (17,50 € per month for the public media) once per household, so students can save money by pretending to live at their parents' place. For car taxes it's usually better to be registered outside of urban areas. The government even changed the law to make faking your residency harder, now you have to register with some form that has to be signed by your landlord.
The cities/municipals do get federal money proportional to the number of peope registered there, and technically it's illegal not to register yourself when you move cities, but students still do the "I live at my parents'" thing.
I guess to the point of Berlin, do municipal taxes work the Estonian way or the North American way in Germany?
[0] https://www.newyorker.com/magazine/2012/03/19/tax-me-if-you-...