Income Taxation and Household Size: Would French Family Splitting Make German Families Better Off?
In this paper, we address the question whether family support via the income tax system is more generous in France than in Germany, as it is often claimed in the public debate. We use two micro-data sets and a micro-simulation model to compare effective average tax rates for different household types in France and Germany. Our analysis shows that the popular belief that French high income families with children face lower average tax rates than their German counterparts is true, however not due to the French Family splitting but rather to the different definitions of taxable incomes in both countries. Actually, low income families with less than three children even fare better in terms of tax relief in Germany than in France. The French system leads to lower average tax rates than the German one (over a large range of the income distribution) only for families with three children.
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- Holly Sutherland & Miles Corak & Christine Lietz & UNICEF Innocenti Research Centre, 2005. "The Impact of Tax and Transfer Systems on Children in the European Union," Innocenti Working Papers inwopa05/30, UNICEF Innocenti Research Centre.
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"Top Incomes and Top Taxes in Germany,"
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1641, CESifo Group Munich.
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- Jörg Althammer, 2002. "Familienbesteuerung - Reformen ohne Ende?," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 71(1), pages 67-82.
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