Why pay taxes for society and makes sense for you personally

I want to be honest here: I like to pay taxes. Not out of passion or enthusiasm, but because I really appreciate the meaning of it. It’s no secret that taxes are an essential part of a functioning community. Of course, I don’t pay more than necessary, but basically I think it’s my duty to make my contribution. in return forI am a form of solidarity with the society I live in and an investment in the stability and cohesion of our country. I’m not concerned with an ideological attitude, but about a realistic assessment: Only through taxation can we maintain our infrastructure, education system, health system and social security systems andimprove.

Quality of life through social security and social cohesion

I am grateful to live in a country that offers a high standard of social security compared to many other countries. It’s a country where I can sleep peacefully at night, even if my children are still out and about. It is a country where every human being has access to good medical care and high-quality education in principle. Even if it’s alwaysI see it as a basic supply that ensures social peace. For me, this is a value that I don’t want to give up lightly. This safety net is the foundation on which individual freedom, prosperity and social progress are built.

Personal experiences that emphasize the importance

An example from my personal environment makes the importance of social security clear: My son Philipp, who was attacked and robbed by eight men in Johannesburg in the middle of the day at the age of 19. It was a traumatic experience that moved me deeply. If he had been in Munich, this incident would probably have dominated the local media’s front pages. but inUnfortunately, South Africa is something like that everyday. It shows: In such countries, security is often just an illusion, and society is suffering from a deep inequality. The police are often powerless, and people are forced to live in fenced-in residential complexes with armed security guards to protect themselves.

The connection between prosperity and social cohesion

What use is your material prosperity when social inequality and violence significantly impair the quality of life? It is an uncomfortable truth that material wealth alone is no guarantee of a good life. The security, the social environment and the trust in the institutions are at least as important. That’s why I see it as my duty to pay taxes -This is the only way a society in which social security and the rule of law are guaranteed can function.

Taxes as an expression of appreciation for society

Another reason why I like to pay taxes is the belief that tax payments are a sign that I have previously acquired something. When I work, make profits or invest, that is proof that I am part of this society and that I have created resources that are worth giving. In the case of investments, there is alsothat a significant proportion of profits are already taxed at company level. This means companies pay taxes before profits are paid out to the shareholders. In addition, the flat-rate withholding tax of 25% indicates that you have at least a certain advantage on the taxpayer side – it’s a kind of feeling that you don’t hand everything over to the tax authorities.

The misconception that everything is fine

However, the reality is more complex. Many people believe that everything is fine when paying taxes because they feel they are doing a fair share. But the truth is that, especially with capital investments, the actual tax burden is often much higher than it appears at first glance. In practice, the situation is different: taxes are for themost investors a chore that you just want to avoid or reduce by clever strategies.

The financial industry manipulation

The financial industry is cleverly exploiting this attitude. She knows that many Germans have the urge to avoid or minimize taxes. This tax avoidance drive is so strong that it has almost become a national sport. The product providers know this weakness and lure with seductive promises: “Mr. Maier, you don’t want to work for the tax office,I have something for her.” People like to work with old, well-known tricks: scarcity, time pressure and short-term actions that are supposed to mislead the investor.

Sales tricks aimed at the psyche

Shortly before Christmas or the turn of the year, calls are made that give the impression that the situation will get even worse next year and that you have to act now to secure tax advantages. The claim is often made that the product is almost sold out. The goal is to put the investor under time pressure and get him to make decisions withoutThe most important questions to consider: Why is money important to me? Does this investment bring me closer to my personal goals? What are the risks involved? Does the investment fit my entire asset strategy? And above all: Does the investment make sense in the long term even without a tax advantage?

The great damage caused by tax-optimized products

Many investors fall for the supposed tax advantages and swallow the largest toxic waste in the financial world: overpriced, commission-rich products that offer hardly any real added value. The list of so-called “tax loopholes” is long: Ostimmobilien, Filmfund – also known as “Stupid German Money” -, container ships, 6b real estate funds and tax-optimized money market fundsand life insurance. All these products are strongly advertised and sold by lawyers, auditors, administrators, marketing agencies and, above all, financial distributors. You earn a lot from it, while investors usually only have the damage.

The sad conclusion: most lose

Because statistics and experience clearly show: Over 90% of these tax-motivated investments end in disaster. Either the product cost ratio is far too high compared to tax savings, or investors suffer losses, which were only calculated nicely by the tax breaks. When entering into such investment products, the following applies in principle: The product costs are in theUsually significantly higher than the actual tax savings. In the worst case, she hits the second rule: first the loss is assigned, then they realize the actual loss.

Tax benefits alarm bells

If tax advantages are involved in an investment, all alarm bells should ring in you. The utmost caution is required. Because most of the time these tax advantages only serve as baits to lure you into a trap.

Invest sensibly in the long

The opposite is true: If all other parameters are correct, you should always choose the variant in which you a) pay less taxes and b) postpone these payments to a later date. It is precisely the shifting of tax payments to the future that is relatively easy to implement. as long as she not constantly exchanging their securities and sticking to long-term, meaningful investments,this happens by itself. The positive effects on your assets are significant.

The power of the tax deferral in the long term

This strategy can prove to be a decisive advantage, especially for longer periods of time. Studies and experiments have shown that consistent tax deferrals can have a significant impact on wealth accumulation. The well-known financial author Gerd Kommer has calculated that an investor who achieves an average return on stock of 8.5% over 30 years and the taxes on hisWinnings over and over again, his final assets can increase by up to 29%. This is a huge difference that can build up over decades.

Invest wisely, move taxes smartly

In summary, it can be said: It is worthwhile not only to look at the return on capital investments, but also to the tax design options. Deliberately moving tax payments into the future can make a significant difference in the development of your assets. It is a strategy that pays off especially for long-term investments and thatwealth can grow significantly. Be vigilant, critically question offers, and rely on long-term, sustainable investment – then you benefit not only from the returns, but also from the tax advantages you really deserve.