IDEAS home Printed from https://ideas.repec.org/a/ces/ifosdt/v58y2005i03p23-25.html
   My bibliography  Save this article

How much revenue loss can be expected from the introduction of a consumption tax system? Less than 1% of GDP?

Author

Listed:
  • Johannes Becker
  • Clemens Fuest

Abstract

The current tax system is frequently seen as a reason for the continuingly weak investment and growth in Germany. A consumption-oriented reform of the tax system is thus favoured by many German economists. Critics of this idea point out that this will lead to a reduction of the assessment basis at the enterprise level, which would either require higher tax rates or would result in high tax revenue shortfalls. Prof. Clemens Fuest and Johannes Becker, University of Cologne, examine the amount of revenue losses that would occur if Germany introduced a consumption-based system of taxation at unchanged tax rates. They show that the loss of tax revenue in the case of a consumption-oriented tax reform in 1983 to 1998 would have been surprisingly small. Apparently, the loss of revenue that would result from a reduction of the assessment basis would be offset by considerable gains from the abolition of tax loopholes and tax-deductible write-offs.

Suggested Citation

  • Johannes Becker & Clemens Fuest, 2005. "How much revenue loss can be expected from the introduction of a consumption tax system? Less than 1% of GDP?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 58(03), pages 23-25, February.
    • Handle: RePEc:ces:ifosdt:v:58:y:2005:i:03:p:23-25
    as

    Download full text from publisher

    File URL: https://www.ifo.de/DocDL/ifosd_2005_3_4.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Roger H. Gordon & Joel Slemrod, 1988. "Do We Collect Any Revenue from Taxing Capital Income?," NBER Chapters, in: Tax Policy and the Economy: Volume 2, pages 89-130, National Bureau of Economic Research, Inc.
    2. Johannes Becker & Clemens Fuest, 2005. "Does Germany Collect Revenue from Taxing Capital Income?," CESifo Working Paper Series 1489, CESifo.
    3. Michael P. Devereux & Rachel Griffith & Alexander Klemm, 2002. "Corporate income tax reforms and international tax competition [‘Do domestic firms benefit from direct foreign investment? Evidence from Venezuela’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 17(35), pages 449-495.
    4. Gordon, Roger & Kalambokidis, Laura & Slemrod, Joel, 2004. "Do we now collect any revenue from taxing capital income?," Journal of Public Economics, Elsevier, vol. 88(5), pages 981-1009, April.
    5. Clemens Fuest & Alfons J. Weichenrieder & Alfons Weichenrieder, 2002. "Tax Competition and Profit Shifting: On the Relationship between Personal and Corporate Tax Rates," CESifo Working Paper Series 781, CESifo.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fuest, Clemens & Peichl, Andreas & Schaefer, Thilo, 2005. "Aufkommens-, Beschäftigungs- und Wachstumswirkungen einer Steuerreform nach dem Vorschlag von Mitschke [Revenue, employment and growth effects of the tax reform proposal by Mitschke]," FiFo Reports - FiFo-Berichte 5, University of Cologne, FiFo Institute for Public Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Johannes Becker & Clemens Fuest, 2005. "Does Germany Collect Revenue from Taxing Capital Income?," CESifo Working Paper Series 1489, CESifo.
    2. Ganghof, Steffen, 2006. "The politics of tax structure," MPIfG Working Paper 06/1, Max Planck Institute for the Study of Societies.
    3. Alan J. Auerbach, 2006. "The Future of Capital Income Taxation," Fiscal Studies, Institute for Fiscal Studies, vol. 27(4), pages 399-420, December.
    4. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," EPRU Working Paper Series 06-06, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    5. Alan Auerbach & Michael P Devereux & Helen Simpson, 2007. "Taxing corporate income," Working Papers 0705, Oxford University Centre for Business Taxation.
    6. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," CESifo Working Paper Series 1793, CESifo.
    7. Roger H. Gordon & Jeffrey K. MacKie-Mason, 1995. "Why Is There Corporate Taxation in a Small Open Economy? The Role of Transfer Pricing and Income Shifting," NBER Chapters, in: The Effects of Taxation on Multinational Corporations, pages 67-94, National Bureau of Economic Research, Inc.
    8. Stefania Albanesi, 2006. "optimal taxation of entrepreneurial capital with private information," 2006 Meeting Papers 310, Society for Economic Dynamics.
    9. Ruud A. De Mooij & Gaëtan J.A. Nicodème & Gaëtan J.A. Nicodeme, 2006. "Corporate Tax Policy, Entrepreneurship and Incorporation in the EU," CESifo Working Paper Series 1883, CESifo.
    10. Roger Gordon, 2004. "Taxation of Interest Income," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(1), pages 5-15, January.
    11. Kalina Koleva, 2005. "A la recherche de l'administration fiscale optimale : l'approche par les coûts d'efficience," Cahiers de la Maison des Sciences Economiques r05050, Université Panthéon-Sorbonne (Paris 1).
    12. Gordon, Roger H, 1992. "Can Capital Income Taxes Survive in Open Economies?," Journal of Finance, American Finance Association, vol. 47(3), pages 1159-1180, July.
    13. Agell, Jonas & Persson, Mats, 2000. "Tax arbitrage and labor supply," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 3-24, October.
    14. Andreas Haufler, 2007. "Sollen multinationale Unternehmen weniger Steuern bezahlen?," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 76(2), pages 8-20.
    15. Marco Bassetto, 2008. "Political Economy of Taxation in an Overlapping-Generations Economy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(1), pages 18-43, January.
    16. Simon Loretz, 2008. "Corporate taxation in the OECD in a wider context," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(4), pages 639-660, winter.
    17. Dethier, Jean-Jacques & John, Christoph, 1998. "Taxing capital income in Hungary and the European Union," Policy Research Working Paper Series 1903, The World Bank.
    18. Michael Keen, 1997. "Peculiar institutions: A British perspective on tax policy in the United States," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 371-400, November.
    19. Dietrich, Maik, 2009. "Entscheidungswirkungen einer europaweit harmonisierten Konzernbesteuerung [Impacts of European Group Taxation]," MPRA Paper 59870, University Library of Munich, Germany.
    20. Weijie Luo & Andrew Pickering & Paulo Santos Monteiro, 2017. "Inequality and the Size of Government," Discussion Papers 17/02, Department of Economics, University of York.

    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ifosdt:v:58:y:2005:i:03:p:23-25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/ifooode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.