www.verbraucher-papst.de/pixelio.de (Copyright)  Mindestlohn Geld Scheine
Economic Bulletin, 24 May 2017

For many years, only better-paid workers benefited from Germany’s real wage increases. In contrast, dependent employees with lower hourly wages suffered substantial losses, while the low-wage sector expanded. Around 2010, these trends came to an end. Now all wage groups benefit from wage ... more

Lara (Copyright)  Geld Cash Finanzen
Interview, 24 May 2017

Mr. Kritikos, you’ve investigated the development of gross hourly wages in Germany. How have these wages developed since Germany’s reunification? Immediately after reunification, there were substantial hourly wage increases, up through 1997 or 1998. After that, growth was minimal ... more

DIW Berlin (Copyright)
Report, 23 May 2017

Algorithms and online platforms – how much governmental intervention do we need? The German Federal Cartel Office has initiated competition proceedings against Facebook, the EU commission is investigating Google, and the EU courts are assessing the legal treatment and possible regulation of ... more

Gk (Copyright)  Steuer Aktenordner Akte
Economic Bulletin, 18 May 2017

Completely eliminating the sharp rise in the tax rate for middle income households in Germany by changing personal income tax rates would mean estimated annual losses in tax revenue of 35 billion euros, or 1.1 percent of GDP. Taxpayers with high incomes would also benefit from this type of relief. ... more

Stefan Redel (Copyright)  Finanzamt Formular Steuererklärung
Interview, 18 May 2017

Mr. Bach, there is growing criticism that the middle income segments are suffering from a tax and social contribution burden that is too heavy. Does the middle class pay a disproportionately high amount of income tax? Actually, the middle class has a relatively low income tax burden. This is ... more

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by Karl Brenke, Alexander S. Kritikos, in DIW Economic Bulletin

For many years, only better-paid workers benefited from Germany’s real wage increases. In contrast, dependent employees with lower hourly wages suffered substantial losses, while the low-wage sector expanded. Around 2010, these trends came to an end. Now all wage groups benefit from wage increases—even if those in the middle of the distribution lag somewhat behind. At the very least, this new pattern means that the gap between high and low wages is not getting wider. This development is kind of surprising, as the labor market is shifting to higher-skilled jobs. Workers with higher hourly wages are still doing relatively well when it comes to wage developments; this applies not only to the long-term trend, but also to the recent developments. A longitudinal analysis based on data from the Socio-Economic Panel (SOEP) shows that with time, a large share of low-wage workers were able to earn much higher hourly wage rates. For example, more than half of those workers whose wages were in the bottom 20 percent in 2010, and who were still dependently employed in 2015, were no longer among the low-wage workers. Full-time employees in this group experienced stronger increases. Overall, the results show that hourly wages have been increasing consistently in real terms since the financial crisis and that the growth has been more evenly distributed than it was before. Nevertheless, the increases since 2010 have not made up for the real wage losses incurred by workers who were in the bottom 40 percent 15 years earlier.

by Stefan Bach, Hermann Buslei, in DIW Economic Bulletin

Completely eliminating the sharp rise in the tax rate for middle income households in Germany by changing personal income tax rates would mean estimated annual losses in tax revenue of 35 billion euros, or 1.1 percent of GDP. Taxpayers with high incomes would also benefit from this type of relief. The ten percent of the population with the highest income would have a relief of around 10.4 billion euros—over 2,000 euros per taxpayer on average— while middle income taxpayers would benefit to a much lesser extent. With regard to tax burdens or taxable income, the middle and higher income segments would experience more relief than the highest income segment. If high tax revenue losses ought to be avoided and the relief to be focused on middle income taxpayers, tax rates in the upper income segments must be raised. A moderate increase in maximum tax rates would only result in limited extra revenue.

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