IDEAS home Printed from https://ideas.repec.org/a/aeq/aeqsjb/v125_y2005_i1_q1_p39-49.html
   My bibliography  Save this article

Distributional Effects of the German Tax Reform 2000 - A Behavioral Microsimulation Analysis

Author

Listed:
  • Peter Haan
  • Viktor Steiner

Abstract

In the year 2000, the German government passed the most ambitious tax reform in postwar German history aiming at significant tax relief for households. We analyze the effects of this reform on the distribution of household incomes using a behavioral microsimulation model based on representative micro-data from the German Socio-Economic Panel (SOEP). Our empirical analysis accounts for the effects of bracket creeping and labor supply adjustment on the distribution of household incomes. We find that the tax reform leads to a significant increase in net household income. The relative gains increase with taxable income, thus income inequality is rising. This is slightly mitigated by the impact of the labor supply responses induced by the reform, especially at the lower end of the income distribution.

Suggested Citation

  • Peter Haan & Viktor Steiner, 2005. "Distributional Effects of the German Tax Reform 2000 - A Behavioral Microsimulation Analysis," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 125(1), pages 39-49.
  • Handle: RePEc:aeq:aeqsjb:v125_y2005_i1_q1_p39-49
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

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


    Cited by:

    1. Peichl, Andreas, 2008. "The benefits of linking CGE and Microsimulation Models - Evidence from a Flat Tax analysis," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 08-6, University of Cologne, FiFo Institute for Public Economics.
    2. Thoresen, Thor O. & Vattø, Trine E., 2015. "Validation of the discrete choice labor supply model by methods of the new tax responsiveness literature," Labour Economics, Elsevier, vol. 37(C), pages 38-53.
    3. Frank M. Fossen, 2007. "Risky Earnings, Taxation and Entrepreneurial Choice: A Microeconometric Model for Germany," Discussion Papers of DIW Berlin 705, DIW Berlin, German Institute for Economic Research.
    4. Bofinger, Peter & Schnabel, Isabel & Feld, Lars P. & Schmidt, Christoph M. & Wieland, Volker, 2015. "Zukunftsfähigkeit in den Mittelpunkt. Jahresgutachten 2015/16 [Focus on Future Viability. Annual Report 2015/16]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201516.
    5. Katharina Wrohlich, 2006. "Labor Supply and Child Care Choices in a Rationed Child Care Market," Discussion Papers of DIW Berlin 570, DIW Berlin, German Institute for Economic Research.
    6. John Dagsvik & Zhiyang Jia & Kristian Orsini & Guy Camp, 2011. "Subsidies on low-skilled workers’ social security contributions: the case of Belgium," Empirical Economics, Springer, vol. 40(3), pages 779-806, May.
    7. Ralf Maiterth & Heiko Müller, 2009. "Beurteilung der Verteilungswirkungen der „rot-grünen“ Einkommensteuerpolitik," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 129(3), pages 375-390.
    8. John K. Dagsvik & Zhiyang Jia & Tom Kornstad & Thor O. Thoresen, 2014. "Theoretical And Practical Arguments For Modeling Labor Supply As A Choice Among Latent Jobs," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 134-151, February.
    9. Stefan Bach & Giacomo Corneo & Viktor Steiner, 2008. "Effective Taxation of Top Incomes in Germany, 1992 - 2002," Discussion Papers of DIW Berlin 767, DIW Berlin, German Institute for Economic Research.
    10. Olivier Bargain & Kristian Orsini, 2006. "Beans for Breakfast? How Exportable is the British Workfare Model?," Research in Labor Economics, in: Micro-Simulation in Action, pages 165-198, Emerald Group Publishing Limited.
    11. 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.
    12. André Decoster & Peter Haan, 2015. "Empirical welfare analysis with preference heterogeneity," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(2), pages 224-251, April.
    13. Peichl, Andreas & Schneider, Hilmar & Siegloch, Sebastian, 2010. "Documentation IZA?MOD: The IZA Policy SImulation MODel," IZA Discussion Papers 4865, Institute of Labor Economics (IZA).
    14. Heiko Müller & Caren Sureth, 2009. "Income tax statistics analysis: A comparison of microsimulation versus group simulation," International Journal of Microsimulation, International Microsimulation Association, vol. 2(1), pages 32-48.
    15. Viktor Steiner & Katharina Wrohlich, 2008. "Introducing Family Tax Splitting in Germany: How Would It Affect the Income Distribution, Work Incentives, and Household Welfare?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(1), pages 115-142, March.
    16. Maximilian Joseph Blömer & Andreas Peichl, 2020. "The ifo Tax and Transfer Behavioral Microsimulation Model," ifo Working Paper Series 335, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    17. Timm Bönke & Giacomo Corneo, 2006. "Was hätte man sonst machen können? Alternativszenarien zur rot-grünen Einkommensteuerreform," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(4), pages 489-519.
    18. Thor O. Thoresen & Zhiyang Jia & Peter J. Lambert, 2016. "Is there More Redistribution Now? A Review of Methods for Evaluating Tax Redistributional Effects," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 72(3), pages 302-333, September.
    19. Peter Haan & Dolores Navarro, 2008. "Optimal Income Taxation of Married Couples: An Empirical Analysis of Joint and Individual Taxation," Discussion Papers of DIW Berlin 838, DIW Berlin, German Institute for Economic Research.
    20. Loeffler, Max & Peichl, Andreas & Pestel, Nico & Siegloch, Sebastian & Sommer, Eric, 2014. "Documentation IZA?MOD v3.0: The IZA Policy Simulation Model," IZA Discussion Papers 8553, Institute of Labor Economics (IZA).
    21. Alexandre Baclet & Fabien Dell & Viktor Steiner & Katharina Wrohlich, 2005. "Verteilungseffekte der staatlichen Familienförderung: ein empirischer Vergleich zwischen Deutschland und Frankreich ; Kurzexpertise ; Forschungsprojekt im Auftrag der Hans-Böckler-Stiftung, Forschungs," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 9, number pbk9, Enero-Abr.
    22. Beznoska, Martin, 2014. "Estimating a consumer demand system of energy, mobility and leisure: A microdata approach for Germany," Discussion Papers 2014/8, Free University Berlin, School of Business & Economics.

    More about this item

    JEL classification:

    • 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
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

    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:aeq:aeqsjb:v125_y2005_i1_q1_p39-49. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Gabriele Freudenmann (email available below). General contact details of provider: http://www.duncker-humblot.de .

    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.