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Länderautonomie in der Einkommensteuer: Konsequenzen eines Zuschlagsmodells / Income Tax Autonomy of German States: Reform Options and Consequences

Author

Listed:
  • Büttner Thiess

    ()

  • Schwager Robert

    () (Universität Göttingen und ZEW, L7,l, D-68161 Mannheim. Tel.: ++49/+6 21/1 23 51 83, Fax: ++49/+6 21/123 52 23)

Abstract

The paper considers the introduction of a surtax on the federal income tax as a means to provide German states with more taxing autonomy. Simulations indicate that even a modest reform would result in strong disparities either in tax revenues or in tax rates across states. Given this background it seems likely that a reform would partially compensate differences in the taxing power by means of adjustments in the revenue sharing and fiscal equalization systems. This would, however, lead to problematic incentives for the states' tax policies. Although horizontal competition would exert a downward pressure on the tax rates, the incentives provided by the horizontal fiscal equalization system and the vertical revenue sharing might well result in excessive taxation.

Suggested Citation

  • Büttner Thiess & Schwager Robert, 2003. "Länderautonomie in der Einkommensteuer: Konsequenzen eines Zuschlagsmodells / Income Tax Autonomy of German States: Reform Options and Consequences," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 223(5), pages 532-555, October.
  • Handle: RePEc:jns:jbstat:v:223:y:2003:i:5:p:532-555
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    References listed on IDEAS

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    1. Wildasin, David E., 1989. "Interjurisdictional capital mobility: Fiscal externality and a corrective subsidy," Journal of Urban Economics, Elsevier, vol. 25(2), pages 193-212, March.
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    6. Esteller-More, Alex & Sole-Olle, Albert, 2001. "Vertical income tax externalities and fiscal interdependence: evidence from the US," Regional Science and Urban Economics, Elsevier, vol. 31(2-3), pages 247-272, April.
    7. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, November.
    8. Michael Keen, 1998. "Vertical Tax Externalities in the Theory of Fiscal Federalism," IMF Staff Papers, Palgrave Macmillan, vol. 45(3), pages 454-485, September.
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    Citations

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    Cited by:

    1. Michael Broer, 2008. "Gestaltungsmöglichkeiten der Stadtstaaten bei gegebener Steuersatzautonomie für die Körperschaftsteuer: eine empirische Analyse," Discussion Papers of DIW Berlin 768, DIW Berlin, German Institute for Economic Research.
    2. Thiess Büttner, 2007. "Reform der Gemeindefinanzen," ifo Working Paper Series 45, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    3. Helmut Seitz, 2008. "Minimum Standards, Fixed Costs and Taxing Autonomy of Subnational Governments," CESifo Working Paper Series 2341, CESifo Group Munich.

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