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Abbau der kalten Progression: nüchterne Analyse geboten

Author

Listed:
  • Katja Rietzler
  • Dieter Teichmann
  • Achim Truger

Abstract

The call for indexing the German income tax schedule to inflation in order to eliminate bracket creep has become widespread in the German tax policy debate. While it is indeed problematic that tax rates rise even when real incomes remain constant, the authors show that currently this is no reason for tax cuts. Changes in both the tax schedule and deductible allowances have more than offset the effects of bracket creep for most taxpayers since 1991. This is illustrated with calculations for a range of constant real incomes and family constellations. However, as the relative tax relief since 1991 has strongly favoured top incomes, a reform of the tax schedule that raises the top tax rate while providing some tax relief for lower and medium incomes may be justified. Copyright ZBW and Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Katja Rietzler & Dieter Teichmann & Achim Truger, 2014. "Abbau der kalten Progression: nüchterne Analyse geboten," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 94(12), pages 864-871, December.
    • Handle: RePEc:spr:wirtsc:v:94:y:2014:i:12:p:864-871
    DOI: 10.1007/s10273-014-1761-z
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    Citations

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    Cited by:

    1. Chang Woon Nam & Christoph Zeiner, 2015. "Effects of Bracket Creep and Tax Reform on Average Personal Income Tax Burden in Germany," CESifo Working Paper Series 5626, CESifo.
    2. Florian Dorn & Clemens Fuest & Björn Kauder & Luisa Lorenz & Martin Mosler & Niklas Potrafke & Luisa Dörr, 2017. "Steuererhöhungen durch die Hintertür – fiskalische Aufkommenswirkungen der Kalten Progression," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 70(02), pages 51-58, January.
    3. 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, February.
    4. Florian Dorn & Clemens Fuest & Björn Kauder & Luisa Lorenz & Martin Mosler & Potrafke. Niklas & Luisa Dörr, 2017. "Die Kalte Progression – Verteilungswirkungen eines Einkommensteuertarifs auf Rädern," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 70(03), pages 28-39, February.
    5. Clemens Fuest & Björn Kauder & Luisa Lorenz & Martin Mosler & Niklas Potrafke & Florian Dorn, 2016. "Hidden tax increases - the extra tax burden of the bracket creep and the expected impact of income tax rates "on wheels" on tax reliefs," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 76, September.

    More about this item

    Keywords

    H11; H24; K34;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

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