Current Reform Proposals for the German Personal Income Tax Schedule: Relieve the Middle Class and High Earners, Burden High Incomes
Abstract The current German personal income tax schedule imposes a relatively heavy burden on the middle class due to the rapid rise in tax progression. Relief through an increase in the basic tax-free allowance or a flattening of the steep increase in marginal tax rates can easily lead to tax losse...
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| Format: | Article |
| Language: | deu |
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Springer
2021-08-01
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| Series: | Wirtschaftsdienst |
| Online Access: | https://doi.org/10.1007/s10273-021-2979-1 |
| _version_ | 1818681661213114368 |
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| author | Stefan Bach |
| author_facet | Stefan Bach |
| author_sort | Stefan Bach |
| collection | DOAJ |
| description | Abstract The current German personal income tax schedule imposes a relatively heavy burden on the middle class due to the rapid rise in tax progression. Relief through an increase in the basic tax-free allowance or a flattening of the steep increase in marginal tax rates can easily lead to tax losses upwards of double-digit billions per year. Top tax rates reduce these losses, but the revenue potential from high earners is limited. For example, if the bottom 95 % of the population is to be relieved of 1 % of their taxable income, the top 5 % have to be charged almost 3 %, the marginal tax rate must increase by 5.5 percentage points. |
| first_indexed | 2024-12-17T10:06:30Z |
| format | Article |
| id | doaj.art-de7d4eddadf74c7b95c949a7b10dd1bc |
| institution | Directory Open Access Journal |
| issn | 0043-6275 1613-978X |
| language | deu |
| last_indexed | 2024-12-17T10:06:30Z |
| publishDate | 2021-08-01 |
| publisher | Springer |
| record_format | Article |
| series | Wirtschaftsdienst |
| spelling | doaj.art-de7d4eddadf74c7b95c949a7b10dd1bc2022-12-21T21:53:10ZdeuSpringerWirtschaftsdienst0043-62751613-978X2021-08-01101860661410.1007/s10273-021-2979-1Current Reform Proposals for the German Personal Income Tax Schedule: Relieve the Middle Class and High Earners, Burden High IncomesStefan Bach0Abteilung Staat, DIW BerlinAbstract The current German personal income tax schedule imposes a relatively heavy burden on the middle class due to the rapid rise in tax progression. Relief through an increase in the basic tax-free allowance or a flattening of the steep increase in marginal tax rates can easily lead to tax losses upwards of double-digit billions per year. Top tax rates reduce these losses, but the revenue potential from high earners is limited. For example, if the bottom 95 % of the population is to be relieved of 1 % of their taxable income, the top 5 % have to be charged almost 3 %, the marginal tax rate must increase by 5.5 percentage points.https://doi.org/10.1007/s10273-021-2979-1 |
| spellingShingle | Stefan Bach Current Reform Proposals for the German Personal Income Tax Schedule: Relieve the Middle Class and High Earners, Burden High Incomes Wirtschaftsdienst |
| title | Current Reform Proposals for the German Personal Income Tax Schedule: Relieve the Middle Class and High Earners, Burden High Incomes |
| title_full | Current Reform Proposals for the German Personal Income Tax Schedule: Relieve the Middle Class and High Earners, Burden High Incomes |
| title_fullStr | Current Reform Proposals for the German Personal Income Tax Schedule: Relieve the Middle Class and High Earners, Burden High Incomes |
| title_full_unstemmed | Current Reform Proposals for the German Personal Income Tax Schedule: Relieve the Middle Class and High Earners, Burden High Incomes |
| title_short | Current Reform Proposals for the German Personal Income Tax Schedule: Relieve the Middle Class and High Earners, Burden High Incomes |
| title_sort | current reform proposals for the german personal income tax schedule relieve the middle class and high earners burden high incomes |
| url | https://doi.org/10.1007/s10273-021-2979-1 |
| work_keys_str_mv | AT stefanbach currentreformproposalsforthegermanpersonalincometaxschedulerelievethemiddleclassandhighearnersburdenhighincomes |