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Tax cuts in income and corporate taxation

Author

Listed:
  • Maximilian Joseph Blömer
  • Eike Johannes Eser
  • Lilly Fischer
  • Max Lay
  • Andreas Peichl

Abstract

This report analyses a range of reform options for income and corporate taxation. In the area of personal income taxation, changes in the tax rate are analysed with the aim of flattening the 'middle class bulge'. The analysis uses the ifo microsimulation model. In the area of corporate taxation, the revenue effects of a gradual reduction of the overall tax burden to a total of 25% are analysed. The tax reform is implemented in four steps with the aim of spreading the additional annual revenue losses evenly over the years 2026 to 2029.

Suggested Citation

  • Maximilian Joseph Blömer & Eike Johannes Eser & Lilly Fischer & Max Lay & Andreas Peichl, 2025. "Tax cuts in income and corporate taxation," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 153.
    • Handle: RePEc:ces:ifofob:153
    as

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    File URL: https://www.ifo.de/DocDL/ifo_Forschungsbericht_153_Steuersenkungen.pdf
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    References listed on IDEAS

    as
    1. Pestel, Nico & Sommer, Eric, 2013. "Shifting Taxes from Labor to Consumption: Efficient, but Regressive?," IZA Discussion Papers 7804, IZA Network @ LISER.
    2. Xing, Jing, 2012. "Tax structure and growth: How robust is the empirical evidence?," Economics Letters, Elsevier, vol. 117(1), pages 379-382.
    3. repec:ces:ifosdd:v:6:y:2025:i:4:p:01-11 is not listed on IDEAS
    4. Eric Zwick & James Mahon, 2017. "Tax Policy and Heterogeneous Investment Behavior," American Economic Review, American Economic Association, vol. 107(1), pages 217-248, January.
    Full references (including those not matched with items on IDEAS)

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