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Local business taxes: replace or reform?

Author

Listed:
  • Martin Junkernheinrich
  • Klaus Bräunig
  • Lorenz Jarass
  • Albert J. Rädler
  • Alfons Kühn

Abstract

The municipal budgets are in a bad state also due to the strong decline in revenue from local business taxes. Faced with this situation, in March of last year the Federal Government appointed a commission for the reform of municipal budgets that presented proposals for the modernisation and/or replacement of local business taxes, among other things. The commission examined two models, the BDI/VCI model and the so-called municipal model. Prof. Martin Junkernheinrich, University of Trier and a member of this commission, presents these proposals in detail. Klaus Bräunig, BDI, and Alfons Kühn, DIHT, using the BDI/VCI model, argue for the replacement of the local business tax with a local earnings and profit tax. Prof. Albert J. Raedler, Munich, favours the revitalisation of the local business tax. Prof. Lorenz Jarass, Fachhochschule Wiesbaden and also member of the commission, proposes a step-by-step transition from the local business tax to a local company tax.

Suggested Citation

  • Martin Junkernheinrich & Klaus Bräunig & Lorenz Jarass & Albert J. Rädler & Alfons Kühn, 2003. "Local business taxes: replace or reform?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 56(09), pages 3-22, May.
    • Handle: RePEc:ces:ifosdt:v:56:y:2003:i:09:p:3-22
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    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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