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Title:Does Germany collect revenue from taxing capital income? PDF Logo
Authors:Becker, Johannes
Fuest, Clemens
Issue Date:2005
Series/Report no.:CESifo working papers 1489
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.
Subjects:cash flow tax
tax revenue effects
effective taxation of capital income
JEL:H21
H25
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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