Why is the German GEZ a fee and not a tax?

Question

In Germany, every household has to pay "Rundfunkbeitrag" (often called GEZ). It is 17,50 Euro per month, which is used to finance public broadcasting.

Normally, I would expect public institutions to be financed by taxes (those that have more have to pay more) instead of a fee (where the poor and the rich pay the same amount).

Wikipedia has a good overview over the history of the fee, and they give required "staatsferne" (distance from the state) as reason to not have a tax. That seems to make sense, but the specifics are unclear to me.

How could the state influence public broadcasting if the GEZ were a tax, compared to the influence the state already has with the fee?

Answer 1

The difference between a fee and a tax is that while a fee can be designated to be spent for one specific purpose, a tax is not. All taxes go into the state coffers and parliament decides how that tax money is then redistributed to all the government activities. History is full of taxes which were promised to be leveraged for very specific purposes but then ended up getting diverted to completely unrelated purposes.

If financing of public broadcasting were controlled directly by the state, then the budget commission would get quite a lot of leverage on the public media. It would be possible for negative reporting to get punished and positive reporting to get rewarded in the next budget. And they would likely get away with it, because government spending decisions usually do not get much attention from those people who are not directly affected by it.

But when the broadcasting fees go to an organization which has its own purse, then politicians lose that leverage. All they can do is change the amount of the legally mandated broadcasting fee, but that would be directly visible to the whole population and raise questions.

Now regarding the question "Is it fair that everyone pays the same broadcasting fee even though people have different incomes?". Maybe, maybe not. There is already precedent for income-dependent mandatory fees in Germany. Health insurance and social security insurances work that way. But handling those is already a bureaucratic nightmare. Integrating the public broadcasting fees into this system would make your yearly income tax statements even more complicated. This would not really be justified considering that public broadcasting fees are about two orders of magnitude smaller than the other social insurance fees.

So it's a much more convenient solution for everyone if everyone gets to pay a flat fee. Those who would really have an issue paying the fee (welfare receivers) can get an exemption.

Answer 2

There are two reasons why the “broadcasting contribution” (Rundfunkbeitrag) was not created as a tax, both of them rather technical:

1. Under the German constitution, the states are responsible for cultural affairs (which includes broadcasting, but also schools and universities). On the other hand, the states only have limited power to create new taxes, and a “broadcasting tax” is not among those they could create.

2. For taxes, by definition (by the definition in German law, that is) there is no connection between the money raised and the money spent. Any tax income flows into the general budget on the state or federal level, and the relevant parliament decides what it is spent on. This means that, if there was a broadcasting tax instead of a fee or contribution, the parliaments could freely decide to cut funding at any time – in particular, of course, for programmes that might criticize the ruling majority.

   The Federal Constitutional Court has ruled in a number of opinions that such government control is unconstitutional. Therefore, public service broadcasting can’t be funded from taxes. The fee/contribution model provides some (limited) protection, because the money flows directly from citizens to the broadcasting institutions. The height of the contribution is formally decided on by the states, but on the recommendation of an independent body (KEF, Kommission zur Ermittlung des Finanzbedarfs) and subject to judicial oversight.

The question of fairness (larger share of the funding from those who can better afford it) is somewhat independent of the tax vs. contribution question: On the one hand, a broadcasting tax could be a household tax; on the other hand, contributions can be graded, e.g. by income. In fact, there already are three grades for the current broadcasting contribution: € 0 for those who are on social welfare; € 5,38 for the severely disabled; and € 17,50 for everyone else. (Companies are required to contribute, too; other amounts apply for them.) It was a political decision to put simplicity before fairness when the household contribution was introduced; those responsible believed the amount was low enough for everyone not on social welfare to cope with.

Answer 3

Why not a tax?

Taxes change value independently of the number of people using them. Therefore, if you want the revenue to be proportional to the number of people using them, you need to adjust them constantly.

Look at the gasoline tax in the United States. In many places it is intended to fund road construction, just as you would like a tax to fund broadcasting. The problem is that with more fuel efficient cars and more expensive gasoline, the gas tax revenues fell. Now, in order to get back to the previous level of funding, they either need to raise the gasoline tax (politically undesirable) or subsidize it from other revenues. Either of those is a political question and is at the mercy of the legislature.

If it were an income tax set aside, then there would be even more pressure to not spend the money or to audit its spending. Note how the federal government wants to add additional restrictions to Medicaid and food stamp funding in the US. Conservatives want work requirements while liberals want restrictions on what foods are covered.

Consider the case of a recession. Note how in the last recession, the government reduced the Social Security tax. This time they did so without also reducing expenditures to match. And they took the funds from the general budget rather than the Social Security trust fund. Part of the reason why they did this was that for many poorer people Social Security is the primary tax they pay. Briefly that was the majority of workers. It's back under 50% now but still above 40%. So no income tax reduction would reach most Social Security recipients at all (absent a negative rate).

Or consider the US shutdowns. In those, the tax would stop being collected and disbursed unless those were considered essential activities. And the designation of essential activities is under political control. Part of the reason why Germany does not have shutdowns is that their approach is separate.

Anyway, the point is that unless you are talking about a tax that is collected separately from the national tax, taxes are inherently under the jurisdiction of politicians. And thus political. Both the amount of the tax and the destination of the spending are controlled politically.

You also might consider the costs of a separate tax. If it takes three hours to fill out the tax form, which is quite possible with copying, etc. (you should make copies of your tax forms in case the government claims you filled them out differently than you did). It's easy enough to generate a cost higher than the fee.

Beyond all this, the actual reason in Germany seems to be that this started out as a fee only paid by people with receivers. As richer people were more likely to buy receivers than poorer people, that implicitly cost richer people more, even as a fee. It was only in 2013 that they changed it to cover all households.

Another issue in Germany is that their welfare system may make it easier to adjust for the fee by increasing payments to welfare. As these are generally focused on poorer households, they may better compensate for the modest cost of the fee than replacing the fee with an income tax would. This goes along with all the other costs that are more household based than income based. For example, poor people don't necessarily have lower calorie requirements, need for water, or less need for access to internet. In Germany, the welfare system is accustomed to managing such things for the poorest.

Political control

There's also the question of whether it would be appropriate for GEZ (or its replacement, the Beitragsservice) to have access to the information of an income tax. It works for broadcasters and is not under direct political control. Should people be mandated to hand over their person income data to a private organization? And should the state confirm that data (as otherwise, people could simply lie about their income)? So from that perspective, the separate structure of the organization precludes it from charging the tax (not the tax would make it political but that only political organizations can tax).

That leaves only the possibility of a state administered tax. But then the state could obviously change its auditing at any time. In theory perhaps the state could add auditing to the existing fee system, but moving collection to the state would make that much more likely. And once the state audits expenditures, it can of course influence them. Just as gas tax revenues in the US could be used for a bridge to nowhere, broadcast tax revenues could be used for politically friendly ends.

Answer 4

If public broadcasting would be financed out of the general budget it would be easy for the government to reduce its funding levels through its yearly budget. In yearly budget discussion there's a lot of pressure to cut cost.

On the other hand, changing the size of the fee can't be done within the yearly budget making process.

Answer 5

Some of the other answers give the reasons that are officially named. I want to add a historic perspective.

GEZ is actually the old term for the system prior to the current "Rundfunkbeitrag". The old GEZ was paid only by people who had a TV, radio or both. So if, for example, you disliked TV on principle, you could just not have one and not pay. I did this for most of my life. Many people of course claimed to not have a TV despite they had, but that is a different discussion.

With the rise of the Internet as an entertainment platform, more and more people went away from public television, and attempts of the government to classify every computer as a "TV reception device" failed spectacularily.

From this, the GEZ was reformed into the "Rundfunkbeitrag", but kept as a (now mandatory) payment (Gebühr / Beitrag) instead of a tax, because changing it into a tax would have required a rework of the entire system. They even kept the old GEZ service company and rebranded it, despite its previous main task - to manage the list of registered people, registrations, deregistrations, checking if people are tricking, etc. had essentially disappeared.

IMHO the reasons asked in your question are as much historical as anything else.