Germany's fiscal federalism has undergone a process of perpetual reform. On the one hand, some tax sources that have existed up to now – the corporate income tax is a good example in this context – will shortly be phased out because of changes in the system. On the other hand the judgement by the Constitutional Court has required a renewal of Germany's equalisation system. Besides an illustration of tax sharing between the three tiers of government, the main part of this paper deals with the equalisation among the 16 federal states. In the framework of the reforming process of the "Solidarity Pact IIW, the distribution of tax revenues, vertical grants and fiscal equalisation among the federal states were newly arranged.
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Paper provided by Institute of Local Public Finance in its series Working Papers with number
02-2008.
Find related papers by JEL classification: H7 - Public Economics - - State and Local Government; Intergovernmental Relations H2 - Public Economics - - Taxation, Subsidies, and Revenue H1 - Public Economics - - Structure and Scope of Government
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