>>>A couple of years ago I cycled from Magdeburg down to the Czech Republic and was hugely impressed with the road improvements in the former East Germany. On some (unavoidable) busy roads there were excellent cycle tracks - completely separated and almost a road in themselves. I guess funding was diverted to where it was needed most ?
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>>Definately in the first 10 years funds ***had*** to be reallocated, but they stayed there and in the west infrastructure is now often worse than in the east - politicians having decreed a special on-top tax they don't want to abolish.
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>Does that mean that citizens in the old West Germany pay a different tax rate to those in the old East Germany ?
>From my limited observation the East still , overall, appears far less prosperous that the West .....

Personal tax rate is the same. Corporations and business owners pay an addtional tax ("Gewerbesteuer") to corporate tax (plus "Solidaritätszuschlag"), which is set at community level and differs a lot. Rich federal states are forced by law to subsidize states with not that much tax power, resulting in some "poorer" states sporting much better baths and pre-schools and thereby lessening the "return" of those taxes for richer western states. Berlin in itself was subsidized as isolated state during cold war and never weaned from subsidies - they are proud to be broke and live off others (overgeneralizing for sure, but other statistics like sick days off and people on welfare point in similar direction). East is less prosperous - but some pensions in the east, getting always higher rises, are not that bad if you factor in rents sometimes less than half of western rents.
That "Solidaritätszuschlag" is always kept under the rug when discussing tax rates - and is just another tax hike going into budget and everybody tries to get a piece of the action....