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Urgently needed: Reduction of over-taxation from hidden tax increases

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  • Dieter Dziadkowski

Abstract

With increasing earnings the "cold progression" of the rate of income tax means, for the taxpayer, that his/her income tax automatically increases more strongly than earnings themselves. These hidden tax increases will grow in 2008 and 2009 due to the nominal wage increases, since a corresponding tax rate adjustment has not been made. In the opinion of Dieter Dziadkowski, former member of the Bareis Commission, in particular the too-low basic exception - to ensure that what is needed for a subsistence level - will lead to burdens on the taxpayer that are unconstitutional. To eliminate the distortions a regulation is necessary in which the income tax scale is constantly adjusted to inflation.

Suggested Citation

  • Dieter Dziadkowski, 2008. "Urgently needed: Reduction of over-taxation from hidden tax increases," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(10), pages 19-24, May.
    • Handle: RePEc:ces:ifosdt:v:61:y:2008:i:10:p:19-24
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    References listed on IDEAS

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    1. Homburg, Stefan, 1995. "Zur Steuerfreiheit des Existenzminimums," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 52(2), pages 182-195.
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    Cited by:

    1. Dieter Dziadkowski, 2020. "Plea and Proposal for a Constitutional and Transparent Income Tax Rate - Notes on 25 Years of Theses of the Income Tax Commission," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(01), pages 30-33, January.
    2. Dieter Dziadkowski, 2018. "Plea for a Realistic Income Tax Rate Structure," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(11), pages 35-47, June.
    3. Dieter Dziadkowski, 2013. "The Regionalisation of More Tax Rates in Germany – The Bavarian Rate as a Starting Point?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 66(05), pages 20-28, March.

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    2. Dieter Dziadkowski, 2013. "The Regionalisation of More Tax Rates in Germany – The Bavarian Rate as a Starting Point?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 66(05), pages 20-28, March.

    More about this item

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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