Konferenzbeitrag
Income tax deduction of commuting expenses and tax funding in an urban CGE study: the case of German cities
Germany like many other European countries subsidize commuting by granting the right to deduct commuting expenses from the income tax base. This regulation has often been changed and has regularly been under debate during the last decades. The pros (e.g. causing efficiency gains with respect to the spatial allocation of labor) and cons (e.g. causing urban sprawl) are well documented. Nonetheless, there is need for further research. For reasons of tractability the few models applied in the tax deduction related literature are based on restrictive assumptions particularly concerning the design of the income taxation scheme and the structure of households (neglecting household heterogeneity) and, most importantly, they do not integrate labor supply and location decision problems simultaneously. Here, for the first time, those and more features are taken into account in a full spatial general equilibrium simulation approach calibrated to an average German city. This model is applied to calculate the impacts of tax deductions on an urban economy thereby considering different funding schemes. Our results suggest that the tax deduction level currently chosen is below the optimal level in the case of income tax funding. If a change in the tax base occurs, e.g. toward consumption tax or energy tax funding, the optimal size of the subsidy should be even higher. Furthermore, the different policy packages cause a very differentiated pattern regarding welfare distribution, environmental (COâ‚‚ emissions) and congestion effects. We also find surprisingly small effects on urban sprawl characterized by suburbanization of residences and jobs and increasing commuting distances.
- Language
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Englisch
- Bibliographic citation
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Series: 51st Congress of the European Regional Science Association: "New Challenges for European Regions and Urban Areas in a Globalised World", 30 August - 3 September 2011, Barcelona, Spain
- Classification
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Wirtschaft
- Event
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Geistige Schöpfung
- (who)
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Hirte, Georg
Tscharaktschiew, Stefan
- Event
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Veröffentlichung
- (who)
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European Regional Science Association (ERSA)
- (where)
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Louvain-la-Neuve
- (when)
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2011
- Handle
- Last update
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10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Konferenzbeitrag
Associated
- Hirte, Georg
- Tscharaktschiew, Stefan
- European Regional Science Association (ERSA)
Time of origin
- 2011
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Tax Deductibility of Commuting Expenses and Residential Land Use with more than one Center
Expenses on forwarding tax the provincial capital
Earnings management in South Korea: Using tax expenses
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State Tax Differentials, Cross-Border Commuting, and Commuting Times in Multi-State Metropolitan Areas
The effect of tax preparation expenses for employees: evidence from Germany
The effect of tax preparation expenses for employees: Evidence from Germany
The tax burden CGE analysis for Slovakia and Slovenia
A self-funding reward mechanism for tax compliance
Income tax deduction of commuting expenses and tax funding in an urban CGE study: the case of German cities
The tax treatment of commuting expenses and job-related mobility
Spatial productivity differences and the optimal tax treatment of commuting expenses
Tax Deductibility of Commuting Expenses and Residential Land Use with more than one Center
Expenses on forwarding tax the provincial capital
Earnings management in South Korea: Using tax expenses
Efficiency effects of tax deductions for work-related expenses
State Tax Differentials, Cross-Border Commuting, and Commuting Times in Multi-State Metropolitan Areas
The effect of tax preparation expenses for employees: evidence from Germany
The effect of tax preparation expenses for employees: Evidence from Germany
The tax burden CGE analysis for Slovakia and Slovenia