Publikationen der Abteilung Staat

Fundamental Reform of Income Tax: In How Far Can the Assessment Basis Be Broadened and Tax Law Simplified?

Intensive discussion is now underway on the tax reform concept put forward by Paul Kirchhof. Analyses based on extrapolations of individual tax return data from the income tax statistics show that ending the main tax concessions and allowances would not be enough to compensate for the loss of revenue from lowering the top rate of tax to 25%. Moreover, the importance of simplifying the tax system is ...

Income Taxation and Its Family Components in France and Germany: A Comparison of Distributional Effects

A comparison based on German and French micro data shows that the redistributive effects of family support provided in the form of tax relief are stronger in Germany than in France. This is true both for redistribution between households of different sizes and for redistribution between households with different incomes. The average burden on single individuals without children compared to other types ...

Minijob-Reform: No Effect on Unemployment, Losses in Income Tax and Social Security Contributions

The so-called 'Minijob-reform', that was introduced in April 2003 as part of the 'Hartz II'-reform, was intended to increase work incentives for people with low wages and thereby reduce structural unemployment. Therefore, the hours restriction of 15 hours per week was abolished and the threshold up to which earnings remain free of social security contributions (SSC) was increased. We calculate the ...

Partial Retirement: Effects on Employment and Implications for Government Budgets

The demographic change is posing many challenges for government budgets. In the face of a shrinking work force, keeping the number of workers and thus pension contributors at the highest possible level is a key economic policy goal. This could be achieved if people retire from the work force later in life. Partial retirement, the option to work part-time while drawing a pension before reaching the ...

Gender Gaps in Pensions and Health: Germany, France, and Denmark

This study quantifies gender-specific differences in retirement income in Germany, Denmark, and France. We show that the “gender pension gap” in Germany is higher than in France and much higher than in Denmark. This ranking is similar to the ranking in the gender pay gap, where Germany has also the highest gender difference. The authors also investigate gender-specific differences in health, i.e. the ...

Gender Parity in German Politics: Further Effort Required

Although many political authorities endorse the basic goal of parity between men and women across the board, reality does not yet reflect this in Germany. In the German Bundestag, for example, at present 37.1 percent of representatives are women. Divided among the six parties with the greatest likelihood of being elected to the Bundestag, a total of 1,979 people are running for office in the upcoming ...

Relief for the Middle Class through Value-Added Tax Cuts: Six Questions for Stefan Bach

Value-Added Tax Cuts Bring Greatest Relief to Lower and Middle Income Households

If the desire is to provide tax relief to households with lower and middle incomes in Germany, it is necessary to target the valueadded tax rather than the personal income tax. Lowering the standard value-added tax rate by one percentage point (from 19 to 18 percent) would mean relief worth 11 billion euro for consumers. The reduced value-added tax rate of seven percent should only be cut for food ...

Little Room for Maneuver with Tax Relief in the Medium Term: Interview with Stefan Bach

Income Tax Reform to Relieve Middle Income Households

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 ...