Contributions and Pension Payments in a Decision-Neutral Income Tax

26 Pages Posted: 9 Nov 2010

See all articles by Dirk Kiesewetter

Dirk Kiesewetter

University of Würzburg

Rainer Niemann

University of Graz, Center for Accounting Research; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: August 1, 2001

Abstract

This paper discusses how payments from and contributions to a life annuity or a pension scheme can be taxed decision neutrally in the context of a classical income tax. We use the concept of "economic income" in the sense of Johansson and Samuelson. Within the framework of an economic analysis life annuities and pension schemes can be treated as investments. Under an ideal neutral income tax, the decision to make such lifetime-dependent investments should not be distorted by taxation. Ideally, taxation should not distort the decision between lifetime-dependent and other investments. The specificity of the approach adopted herein is that neutrality of taxation holds ex ante and also ex post if the amount of pension claims is not yet known during the accumulation period, as it is the case with the pay-as-you-go public pension scheme in Germany and many other countries.

Note: Downloadable document is in German.

Suggested Citation

Kiesewetter, Dirk and Niemann, Rainer, Contributions and Pension Payments in a Decision-Neutral Income Tax (August 1, 2001). Available at SSRN: https://ssrn.com/abstract=1705285 or http://dx.doi.org/10.2139/ssrn.1705285

Dirk Kiesewetter (Contact Author)

University of Würzburg ( email )

Sanderring 2
Würzburg, D-97070
Germany

Rainer Niemann

University of Graz, Center for Accounting Research ( email )

Universitätsstr. 15 / G2
Graz, 8010
Austria
+43-316-380-6444 (Phone)
+43-316-380-9595 (Fax)

HOME PAGE: http://www.uni-graz.at/steuer

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

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