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Der Weg ist frei: mehr Steuergerechtigkeit durch nachhaltigen Abbau der kalten Progression

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  • Philipp Breidenbach
  • Roland Döhrn
  • Tanja Kasten

Abstract

Using a microsimulation model, we estimate the effect of inflation adjusted tax brackets for the German income tax, implementing a standardised annual reduction of bracket creep. In light of the current low inflation rate, this would lead to a moderate decrease in tax revenue in the next two years. Looking at the distributional effects of such a tax reduction, the progressive tariff implies that upper income groups would benefit most in absolute terms. However, in relative terms, lower and middle class incomes in particular would be relieved of a substantial burden. Given the current economic and political environment, there is leeway to implement such tax reform now. Copyright ZBW and Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Philipp Breidenbach & Roland Döhrn & Tanja Kasten, 2014. "Der Weg ist frei: mehr Steuergerechtigkeit durch nachhaltigen Abbau der kalten Progression," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 94(12), pages 859-863, December.
    • Handle: RePEc:spr:wirtsc:v:94:y:2014:i:12:p:859-863
    DOI: 10.1007/s10273-014-1760-0
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    Citations

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    Cited by:

    1. Döhrn, Roland & Barabas, György & Fuest, Angela & Gebhardt, Heinz & an de Meulen, Philipp & Micheli, Martin & Rujin, Svetlana & Schmidt, Torsten & Zwick, Lina, 2015. "Inlandsnachfrage trägt Konjunktur," RWI Konjunkturberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, vol. 66(2), pages 5-14.
    2. FlorianDorn & ClemensFuest & BjörnKauder & LuisaLorenz & MartinMosler & NiklasPotrafke & LuisaDörr, 2018. "How Bracket Creep Creates Hidden Tax Increases: Evidence from Germany," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(04), pages 34-39, January.
    3. Florian Dorn & Clemens Fuest & Björn Kauder & Luisa Lorenz & Martin Mosler & Potrafke. Niklas & Luisa Dörr, 2017. "Die Kalte Progression – Verteilungswirkungen eines Einkommensteuertarifs auf Rädern," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 70(03), pages 28-39, February.
    4. repec:ces:ifodic:v:15:y:2018:i:4:p:50000000000859 is not listed on IDEAS
    5. Döhrn, Roland & Barabas, György & Fuest, Angela & Gebhardt, Heinz & an de Meulen, Philipp & Micheli, Martin & Rujin, Svetlana & Zwick, Lina, 2015. "Die wirtschaftliche Entwicklung im Inland: Konjunktur bleibt aufwärts gerichtet," RWI Konjunkturberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, vol. 66(3), pages 39-98.
    6. Florian Dorn & Clemens Fuest & Björn Kauder & Luisa Lorenz & Martin Mosler & Niklas Potrafke & Luisa Dörr, 2017. "How Bracket Creep Creates Hidden Tax Increases: Evidence from Germany," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(04), pages 34-39, December.
    7. Clemens Fuest & Björn Kauder & Luisa Lorenz & Martin Mosler & Niklas Potrafke & Florian Dorn, 2016. "Hidden tax increases - the extra tax burden of the bracket creep and the expected impact of income tax rates "on wheels" on tax reliefs," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 76, July.

    More about this item

    Keywords

    D04; H20; H30;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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