Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18953
Authors: 
Becker, Johannes
Fuest, Clemens
Year of Publication: 
2005
Series/Report no.: 
CESifo Working Paper 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

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