Coffee Tax: Great Moments in Foreign Government

by Dan Mitchell

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German politicians apparently have been hot on the trail of evil evaders who did not pay tax on coffee ordered over the Internet. To address this terrible crisis, the government spent 800,000 euro and tracked down 4000 dangerous criminals. Shockingly, a few cynics, including the folks at Reuters, are trying to diminish this triumph by pointing out that the government spent 30 times more than it collected:

Germany spent more than 30 times as much collecting taxes on coffee beans ordered online from abroad than it received in the tax revenues, the accounting office said on Tuesday. Some 4,000 Germans who bought coffee over the Internet from other EU countries but failed to pay the coffee tax have been charged between a few cents to 10 euros ($14.81) in taxes and fees, said Dieter Engels, head of Germany’s Federal Accounting Office. Tax collectors ended up with just 25,000 euros, way below the 800,000 euros in the costs of staff charged with collecting the payments, Engels said.

But look at the bright side. The Obama people doubtlessly will be much more efficient as they administer a government-run health care system. Even if you throw in the cost of jail time for people who refuse to buy health insurance and the cost of foregone economic growth because of bigger government, my guess is that America will only lose $5 for every $1 of tax the government collects.


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Posted Dec 20th 2009 at 7:41 am in Economics, News, Obama | 138 Comments