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May 14, 2012

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In a new package of proposed laws beautifully entitled "Rewarding Life’s Work” planned by the Merkel government, the self-employed will be required to pay a monthly "retirement contribution" of around €350 to help fill up the coffers of the bankrupt German pension system which is already subsidized by €80 billion in taxpayer money beginning in 2013.

Freelance writers and artists luckily enough to have gotten into the cosy Künstlersozialkasse will continue to pay the low, low rates of health and retirement insurance, while people such as freelance programmers, tour guides, language teachers, cultural organisers, shop and restaurant owners will have to cough up the cash – on top of the high health insurance premiums (usually already at least €300 a month) they already pay monthly. High-earning lawyers and doctors as well as other friends of the conservative Merkel government such as rich people who live off of their investments – are exempt from the law!

An article in co-working magazine Deskmag explains it well: while the point of this new law is to keep the thirty-something freelancers of today from becoming the beggars of 2050, it might just turn them into the Hartz IV recipients of today.

Berlin is especially susceptible to this legislation, as it will kill off myriad microcosms of entrepreneurism in every imaginable field from culture to food to IT. Or else drive more small business people into the tax-free black market.

The architect of the law, aristocratic Minister of Labour Ursula von der Leyen, surely has never experienced the highs and lows of starting up something small on a tiny budget – something you're passionate about, something you believe in, something that makes you happy, even if it provides barely enough to live off of in the beginning.

IT entrepreneur Tim Wessels – who started his own company while in high school – has set up an official Bundestag petition to protest the proposed law. If the petition receives 50,000 e-signatures by May 22, he will be given a chance to give a talk in parliament. Sign it now!

UPDATE, May 23, 2012: The above-mentioned petition has received well over the required 50,000 signatures. The petitioner will now have a chance to make his case in the Bundestag. Let's keep our fingers crossed.

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May 14, 2012

Comments (6)

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freelance tax

some professions have to pay already (teachers, midwives). It is expensive, and one reason I've never gone full time freelance. But it does maybe make sense to think about the long-tem...i.e. your pension?! There may well be an exemption for people who have made private arrangements, so if it does look like getting in that would be my tip: set up a private pension plan. Many take the risk and don't register as freelancers. If it comes out they want 4 years backpay though, so you'd better be putting something aside!

st more than 1 years ago

@ Alan Janssens

How the new pension contributions or "freelance tax" will work or exactly how it will be calculated is still up in the air. The government has only said it will be a mimimum 300-350 per month, regardless of your income level - if you make more than 400 euros per month!!! The law hasn't actually passed yet so let's hope they come up with a more fair and affordable solution for the "small" freelancer.

Seymour Gris more than 1 years ago

more info needed

If I make 250 euros freelance, I will be asked to pay 350 top up tax...this 'average' thing needs more explanation....what is the percentage on the freelance income?

Alan Janssens more than 1 years ago

It always the same

Goverment are criminals, 1% of the population are the wealthy ones who have ALL the power and they rule the other 99%...us because we let them! They will keep going with there rules until the human race die out! Graham Hancock Knows all about that!!!!!!

Abz more than 1 years ago

killing the freelance

Well, yes, I couldn't help thinking about a "racist motivation" as well.
Anyway, the reform will hit also Germans...could it be that the Government just doesn't want small freelancers to exists?
With such a law, freelancers would be forced back in the employed work market.
They would supply "fresh meat" for any job, also in factories, hospitals, etc. and for very low incomes, since in Germany there is no limit yet, on how low a person can be payed for their job.
So the problem is for everybody who lives in Germany. Science fiction maybe, but maybe not...

Hard shell more than 1 years ago

Why does this headline single out the creative classes?

Germany is going all-freelance. Everyone, creative or not, is affected. Thing is, innovation in Germany is only done by foreigners, and CDU voters, most of whom will be dead by the end of the decade and therefore couldn't care less about innovation, would love to drive all the foreigners out. So: problem.

Busking Billy more than 1 years ago

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