Word! The Language Column
Toxic Oasis

Terms like “tax haven” or “tax exile” may sound harmless – but they distort reality. Daniel Stähr shows how language shapes our perception of taxes, obscures problems, and why we should start speaking about them more precisely and honestly.

By Daniel Stähr

I’ll admit it: taxes are anything but sexy. Who actually enjoys doing their income tax return? Even the prospect of a refund isn’t quite enough to motivate us to sit down with a pile of loosely sorted paperwork and relive the past financial year. And when it comes to tax debates in parliament, most people don’t exactly feel a thrill either.

If taxes are already annoying on a personal level – how are we supposed to trust the system as a whole? Don’t governments and politicians waste our tax money anyway? And wouldn’t that money be better off in my own pocket?
Those who ask such questions often overlook a key fact: taxes are the foundation of modern democracy. Which makes it all the more troubling how we talk about them.

On the road to paradise

It’s a bizarre quirk of the German language that we use euphemisms like “tax flight” (“Steuerflucht”) or “capital flight” (“Kapitalflucht”). People who are forced to flee their home countries usually have lost everything and endured unimaginable trauma. People who engage in tax or capital flight, by contrast, simply want to hold on to even more. Given the absurdity of this metaphor, it’s no surprise that the places where they flee to are called “tax havens” (“Steueroasen”) or “paradises” (“Steuerparadiese”).

What all these terms have in common is that they cast taxes as a burden, something to escape from. You can see that, too, in terms like “tax burden” (“Steuerlast”) or “tax loophole” (“Steuerschlupflöcher”). In everyday German, taxes seem to be nothing but negative.

And there’s another image tied to the word “tax haven” (“Steueroase”): the tropical island where shady businessmen arrive with suitcases full of money to avoid the greedy tax authorities. But in reality, four of the world’s ten largest tax havens are in Europe: Luxembourg, Ireland, the Netherlands and Switzerland. With their labyrinthine legal structures, they help companies in Germany alone avoid an estimated 5.7 billion euros in taxes each year. That doesn’t sound much like paradise anymore, does it?

What am I paying for, anyway?

Do you enjoy living in a democracy?
If your answer is yes, then you might want to join my camp of tax enthusiasts. Because taxes don’t just fund the welfare state, education, national defense and infrastructure – all of which are investments that private enterprise could never handle alone, even the most radical free-market champions are forced to admit that.

But taxes can do even more. They can deter people from harming themselves or others – and in doing so, reduce costs.
Take, for example, carbon taxes to fight climate change or sugar taxes to promote public health. And as political scientist Martyna Linartas convincingly argues in her excellent book Unverdiente Ungleichheit (Unearned Inequality), taxes have a third crucial function: they can help close the gap between rich and poor.

Democracy’s sharpest sword

For Linartas – and for me – taxes are democracy’s sharpest sword, because without them, a sustainable and stable society would simply not be possible.
So it’s high time we left terms like “tax haven” and “tax paradise” behind. My suggestion? Let’s start calling countries that help the ultra-rich and corporations evade taxes “tax Charons.” Because just like the mythical ferryman who rowed the souls of the dead into the realm of death, so-called tax havens are helping our democracies to die.