Interview , News of 21 December 2016

"The tax burden is surprisingly evenly distributed": five questions for Stefan Bach

Andre Bonn (Copyright)  Hosentasche Tasche Taschen
Copyright: Andre Bonn

Mr. Bach, DIW Berlin analyzed the distribution effects of the German tax and social security contribution systems in cooperation with Freie Universität Berlin. Which income group in Germany makes the highest contribution to income tax revenues?

High-income households generate most of the income tax. The wealthiest ten percent pays almost 60 percent of total tax revenue. On the other hand, the lower-income half of the population pays only five percent of the income tax revenue. This shows that the tax is highly progressive. However, it should be considered that the income tax generates only half of tax revenues—indirect taxes are responsible for the other half.

The full interview with Stefan Bach in: DIW Economic Bulletin 51+52/2016  | PDF, 0.57 MB