IDEAS home Printed from https://ideas.repec.org/p/diw/diwwpp/dp717.html
   My bibliography  Save this paper

How Should Local Governments Tax Local Business?: Lessons from an International Comparison and a Microsimulation Analysis for Germany

Author

Listed:
  • Frank M. Fossen
  • Stefan Bach

Abstract

The local business tax as the main revenue source of local governments in Germany has been under extensive debate for decades. Proposals for reform range from a broad tax base in the sense of an origin-based value-added tax to a pure profit tax that could be implemented as a surcharge on corporation and personal income tax. Local business taxation systems in OECD countries actually represent the whole spectrum between these two extremes. We use a newly developed microsimulation model for the business sector in Germany to analyse the fiscal and distributional effects of the general reform options identified, including the extension of the local business tax to liberal professionals. We also analyse the effects of the actual German business tax reform 2008 with respect to local business tax revenues.

Suggested Citation

  • Frank M. Fossen & Stefan Bach, 2007. "How Should Local Governments Tax Local Business?: Lessons from an International Comparison and a Microsimulation Analysis for Germany," Discussion Papers of DIW Berlin 717, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp717
    as

    Download full text from publisher

    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.62887.de/dp717.pdf
    Download Restriction: no

    Citations

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


    Cited by:

    1. Stefan Bach & Michael Broer & Frank M. Fossen, 2008. "Sollen Freiberufler und Landwirte Gewerbesteuer zahlen?: Steuersystematische Ɯberlegungen und empirische Wirkungsanalysen," Discussion Papers of DIW Berlin 761, DIW Berlin, German Institute for Economic Research.
    2. Lkhagvadorj, Ariunaa, 2010. "Fiscal Federalism and Decentralization in Mongolia," MPRA Paper 28758, University Library of Munich, Germany, revised Mar 2010.

    More about this item

    Keywords

    Local business tax; microsimulation; local taxation; tax reform;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs

    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:diw:diwwpp:dp717. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek). General contact details of provider: http://edirc.repec.org/data/diwbede.html .

    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 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.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.