Feb. 21 (Bloomberg) -- When Andreas bought a new hard drive at a Munich computer shop the clerk offered it for 127 euros with a receipt or 80 euros without. He took the lower price.

Most Germans make similar deals to avoid high taxes, the film production manager said. Klaus Zumwinkel, the former Deutsche Post AG chief executive officer being investigated for using Liechtenstein foundations to evade 1 million euros ($1.5 million) in taxes, is no different, said Andreas, who asked not to use his full name because he's breaking the law.

``Zumwinkel did nothing wrong if you take into account the fact that everyone is doing it,'' said Andreas, 22. ``The guys who make millions every year aren't going to be able to hide it without someone to help them.''

Chancellor Angela Merkel has failed to fulfill a campaign promise to simplify the tax code and reduce tax avoidance. Germans evade about 30 billion euros in taxes every year, estimated Dieter Ondracek, head of the German tax collectors' union DStG. That's more than 6 percent of the 495.3 billion euros of taxes collected at all levels of government last year.

``Unfortunately, tax evasion has become a popular sport in Germany,'' Ondracek said Feb. 19 in an interview with Bloomberg Television in Berlin.

Germany last year increased its top income tax rate to 45 percent, ranking it eighth among the 27 European Union nations. Capital gains taxes of as much as 50 percent are also among the highest in Europe.

Wealthy Germans

Zumwinkel is one of several hundred wealthy Germans under investigation for illegally funneling money to foundations in the principality of Liechtenstein to avoid taxes. The inquiries will uncover more well-known individuals in business, politics and sports, the Handelsblatt newspaper reported today, citing unidentified investigators.

People of more modest means can find loopholes in books such as ``1,000 Legal Tax Tricks'' by Franz Konz, who's helped Germans cut their tax bills for 20 years. His book, published last year by Droener/Knaur, is the bestselling tax volume on Amazon.com's German language site.

Part of the issue is that German tax laws have become increasingly complicated as politicians added more and more exemptions. Since German reunification in 1990, the number of tax advisers in the country has jumped 60 percent to 72,669, according to the latest statistics from the BStBK tax advisers' federation.

Simpler Tax Rules

Before the 2005 election, 52 percent of German executives wanted simpler tax rules, outnumbering those who wanted lower levies by more than two to one, according to a poll by the Ipsos opinion research institute. Among the general public, two-thirds said they preferred a simpler system to lower rates.

``The complex system we have is an invitation to try everything possible to evade tax,'' Martin Wansleben, managing director of the DIHK chamber of industry and trade, said in a Feb. 19 interview on Bloomberg Television. ``Now is the time for the government to review its tax laws.''

The government must devise rules that are seen as just, said Wansleben, whose group represents 3.5 million companies. Globalization, with its free flow of capital and the emergence of remote tax havens that don't fall under EU jurisdiction, has made the job more difficult, he said.

Liechtenstein, Andorra and Monaco are considered ``uncooperative tax havens'' that have failed to improve transparency and the exchange of tax information, according to the Organization for Economic Cooperation and Development.

Criminal Behavior

As long as that persists, ``residents in other countries will continue to be tempted to evade their tax obligations,'' OECD Secretary-General Angel Gurria said Feb. 19 in an e-mailed statement. When that temptation meets complex tax laws, criminal behavior is bound to result, Ondracek said.

``People feel they don't know all the loopholes so they're constantly uneasy about paying too much tax, which prompts them to do things that are sometimes illegal,'' he said. ``A tax burden that's generally seen as too high and wasteful government spending'' contribute to discontent.

Andreas agrees.

``It's not about greed, it's about getting by,'' he said. ``It's not a crime if everybody does it.''

To contact the reporters on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net; Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net.

Last Updated: February 21, 2008 04:20 EST