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Title:The responses of taxable income induced by tax cuts: Empirical evidence from the German taxpayer panel PDF Logo
Authors:Gottfried, Peter
Witczak, Daniela
Issue Date:2009
Series/Report no.:IAW-Diskussionspapiere 57
Abstract:The elasticity of taxable income has gained increasing attention as a fiscal policy parameter. This paper provides empirical evidence for Germany and adds to the relatively small body of literature for European countries. We use a large new panel data set to analyze the taxable income response to tax rate changes in 2004 which were part of an extensive reform programme in Germany at the beginning of this century. We find an average elasticity of approximately 0.6. Separately estimated income effects however are mostly small or insignificant. The results vary when dividing taxpayers by income type and group.
Subjects:elasticity of taxable income
tax reform
net-of-tax rate
JEL:H24
H31
Document Type:Working Paper
Appears in Collections:IAW-Diskussionspapiere, Institut für Angewandte Wirtschaftsforschung (IAW)

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