I’ve used the “most depressing chart” approach when writing about the United States, about Europe, about Japan, and about the western world.

Today, let’s focus on Germany.

And I’ll start with a caveat. I wrote about Germany earlier this month and that column included several charts that might qualify. Especially the last visual which showed that government dependency can be more lucrative that private employment.

Here’s a chart that helps to explain why there’s a problem. For a hypothetical 2-earner, 2-children household, it shows that they actually have less disposable income if their gross pay increases from €4000 per month to €5000 per month.

By the way, Germany isn’t the only country that has the equivalent of 100 percent-plus tax rates.

I’ve shared data showing this problem also exists for some households in the United States and the United Kingdom.

Here’s the analysis from @johannesmkx, who shared the chart on Twitter/X.

By the way, since I don’t know this person and I’m not familiar with the details of German tax and redistribution policies, I don’t know if the chart is fully accurate.

So I read through the comments and found this tweet from @pepeller.

There are four takeaways from this analysis.

• There is some increase in disposable income for 2-earner, 2-children households as gross income rises from €3000 per month to €6000 per month, but it’s ridiculously small (€3000 of additional gross income only translates to €400 more disposable income – akin to a marginal tax rate of more than 85 percent).
• There’s a much-bigger increase in disposable income for single people as their gross income rises (the gap is presumably caused by the withdrawal of per-child handouts given to parents).
• Grok did not disagree (though also wasn’t asked) whether the implicit marginal tax rate is greater than 100 percent for 2-earner, 2-children households with incomes climbing from €4000 per month to €5000 per month.
• It was a slight exaggeration for @johannesmkx to write that “it doesn’t matter whether you earn 3000 EUR or 6000 EUR per month” because “the tax office equalizes you either way,” but implicit marginal tax rates of more than 85 percent make his point very relevant from an economic perspective.

The bottom line is that Germany has a major problem, regardless of whether the above numbers are 90-percent accurate or 100-percent accurate.

No wonder the country is going downhill (and not just because of bad fiscal policy). As the title says, quite depressing.

P.S. For more information about bad German tax policy, see here, here, here, here, and here.