Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/39211 
Year of Publication: 
2009
Series/Report no.: 
IAW Diskussionspapiere No. 57
Publisher: 
Institut für Angewandte Wirtschaftsforschung (IAW), Tübingen
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

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