Fri Jul 7, 2017 05:05AM
Germany
Germany
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Europe’s largest economy is facing its biggest post-war tax scandal. Germany’s tax system has been fleeced of $36bn since 2001, as a group of bankers, lawyers and stockbrokers have employed practices to avoid paying tax on large-scale stock transactions. This amount equates to about 10% of the annual government budget expenditure, surpassing the combined money spent per year on healthcare and education & research.

Or as German newspaper Die Zeit puts the amount would be enough to cover the entire refugee influx for one year. The full extent of those practices is not easy to understand, mainly because they involved fiendishly complex transactions, which can be divided into two types.

The Untouchables

In the United States, the top six banks own assets equivalent to 60 percent of the nation's GDP. Perhaps, that’s the reason why both the criminal justice system and the civil courts seem impotent to stop them, even when they get caught gaming the system. The Libor scandal is a perfect example.  Despite so many instances of at least attempted manipulation, the involved banks mostly got away with it. Barclays got off with a relatively minor fine in the $450 million range, UBS was stuck with $1.5 billion in penalties, and RBS was forced to give up $615 million. Apart from a few low-level agents overseas, no individual involved in this scam that impacted nearly everyone in the industrialized world was even threatened with criminal prosecution. Two of America's top law-enforcement officials, Attorney General Eric Holder and former Justice Department Criminal Division chief Lanny Breuer, confessed that it's dangerous to prosecute offending banks because they are simply too big. Making arrests, they say, might lead to "collateral consequences" in the economy.