Distributional and Welfare Effects of Germany's Year 2000 Tax Reform
AbstractThis paper empirically investigates distributional and welfare effects of Germany's year 2000 tax reform. The reform is simulated in an ex-ante behavioral microsimulation approach. Dead weight loss of capital income taxation is estimated in a structural model for household savings and asset demand applied to German survey data. Significant reductions in tax rates result in income gains, especially in higher tax brackets, whereby income inequality increases, in particular in East-Germany. Moreover, households increase savings and alter the structure of asset demand due to shifts in relative asset prices. As a result, utility losses reduce welfare effects for almost all households. --
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Bibliographic InfoPaper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis with number 48686.
Date of creation: 2011
Date of revision:
Capital income taxation; household savings; asset demand; welfare effects;
Other versions of this item:
- Richard Ochmann, 2010. "Distributional and Welfare Effects of Germany's Year 2000 Tax Reform," Discussion Papers of DIW Berlin 1083, DIW Berlin, German Institute for Economic Research.
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
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