High Tax Rates Contributing to German ‘Brain Drain’

The UK-based Independent reports that German emigration levels have reached record levels, in large part because the highly skilled are escaping the country’s onerous tax burden. Switzerland is the top destination, especially since a move across the border can yield a 40 percent reduction in the tax burden:

For a nation that invented the term “guest worker” for its immigrant labourers, Germany is facing the sobering fact that record numbers of its own often highly-qualified citizens are fleeing the country to work abroad in the biggest mass exodus for 60 years. Figures released by Germany’s Federal Statistics Office showed that the number of Germans emigrating rose to 155,290 last year — the highest number since the country’s reunification in 1990 — which equalled levels last experienced in the 1940s during the chaotic aftermath of the Second World War.

…Leading economists and employers say the trend is alarming. They note that many among Germany’s new breed of home-grown “guest workers” are highly-educated management consultants, doctors, dentists, scientists and lawyers. …Fed up with comparatively poor job prospects at home — where unemployment is as high as 17 per cent in some regions — as well as high taxes and bureaucracy, thousands of Germans have upped sticks for Austria and Switzerland, or emigrated to the United States. …More than 18,000 Germans moved to Switzerland last year. The US was the second most popular destination with 13,245, followed by Austria with 9,309. Switzerland already has a resident German population of 170,000.

…Claus Boche, a 32-year-old executive, left the west German city of Paderborn two-and-a-half years ago to take up a job with a Swiss management consulting firm. He now lives in Zurich. “Nearly everything is less bureaucratic and more go ahead than in Germany,” he said. “I also pay about 40 per cent less tax. I have no plans to go back.”

…Thomas Bauer, a labour economist from Essen, was scathing about Germany’s employment conditions. “Germany is certainly not attractive when compared to other countries in Europe,” he said. “The taxes are too high, the wages are too low and feelings of jealousy towards high-income earners is widespread. This is a special deterrent to the highly qualified.”