Does Germany Collect Revenue from Taxing Capital Income?
25 Pages Posted: 21 Jul 2005
Date Written: June 2005
Abstract
A widespread objection to the introduction of consumption tax systems claims that this would lead to high tax revenue losses. This paper investigates the revenue effects of a consumption tax reform in Germany. Our results suggest that the revenue losses would be surprisingly low. We find a maximum revenue loss of 1.6 percent of annual GDP. In some years, we even find a tax revenue gain. This implies that the current tax system collects little revenue from taxing the normal return to capital. Based on these results, we calculate a macroeconomic measure of the effective tax rate on capital income.
Keywords: cash flow tax, tax revenue effects, effective taxation of capital income
JEL Classification: H25, H21
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Income Inequality in the United States, 1913-1998 (Series Updated to 2000 Available)
By Thomas Piketty and Emmanuel Saez
-
The Evolution of Top Incomes: A Historical and International Perspective
By Thomas Piketty and Emmanuel Saez
-
Top Wealth Shares in the United States: 1916-2000: Evidence from Estate Tax Returns
By Emmanuel Saez and Wojciech Kopczuk
-
Where Did the Productivity Growth Go? Inflation Dynamics and the Distribution of Income
-
Where Did the Productivity Growth Go? Inflation Dynamics and the Distribution of Income
-
The Distribution of Top Incomes in Australia
By Anthony B. Atkinson and Andrew Leigh
-
Dying to Save Taxes: Evidence from Estate Tax Returns on the Death Elasticity
By Wojciech Kopczuk and Joel B. Slemrod
-
The Distribution of Top Incomes in New Zealand
By Anthony B. Atkinson and Andrew Leigh