Earlier or Later: A General Equilibrium Analysis of Bringing Forward an Already Announced Tax Reform

Arbeitspapier

The German Income Tax Reform 2000, which announced a reduction in income tax rates to be implemented in a series of three stages, was welcomed by the public as a step towards unleashing lurking growth potentials. Nonetheless, in the course of the year 2001 a dispute arose, centering around the question, whether or not the later stages of the German Income Tax Reform should be brought forward. The present paper assesses the welfare and macroeconomic consequences of the German Income Tax Reform in the scope of a simplified DGE model of the Auerbach-Kotlikoff type and deals explicitly with the issue of bringing forward an already announced tax reform. Besides evaluating the considered fiscal policy options in terms of their (social) welfare implications we touch on the political economy aspects of implementing a tax reform.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionsbeiträge ; No. 123

Classification and Topics

• Classification: Wirtschaft ; Fiscal Policies and Behavior of Economic Agents: General ; Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes ; Fiscal Policy ; Computable and Other Applied General Equilibrium Models
• Subject: German Tax Reform ; early tax reform ; overlapping generations ; DGE model ; Einkommensteuer ; Steuerreform ; Ankündigungseffekt ; Overlapping Generations ; Allgemeines Gleichgewicht ; Wohlfahrtseffekt ; Schätzung ; Theorie ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Honerkamp, Josef ; Moog, Stefan ; Raffelhüschen, Bernd
• Event: Veröffentlichung
• (who): Albert-Ludwigs-Universität Freiburg, Institut für Finanzwissenschaft
• (where): Freiburg i. Br.
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/22997
• URN: urn:nbn:de:bsz:25-opus-18579