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Title:Economic Effects of VAT Reform in Germany PDF Logo
Authors:Boeters, Stefan
Böhringer, Christoph
Büttner, Thiess
Kraus, Margit
Issue Date:2006
Series/Report no.:ZEW Discussion Papers 06-30
Abstract:In the tax policy debate, differentiation of value-added taxes is often justified by distributional concerns. Our quantitative analysis for Germany indicates that such concerns are misplaced. We find that the abolition of VAT differentiation has only negligible redistributive effects. Instead, reduced VAT are found to act as industry-specific subsidies. Whereas the overall welfare effects of pure VAT reforms are very small, a revenue-neutral introduction of a harmonised VAT combined with reductions in the marginal income tax rates or social security contributions turns out to produce substantial welfare gains for all households.
Subjects:VAT
tax reforms
distribution
efficiency
applied general equilibrium
JEL:H24
H22
D58
Document Type:Working Paper
Appears in Collections:ZEW Discussion Papers
Publikationen von Forscherinnen und Forschern des ZEW

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