Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75823
Authors: 
Fehr, Ernst
Wiegard, Wolfgang
Year of Publication: 
2001
Series/Report no.: 
CESifo Working Paper 484
Abstract: 
This paper deals with the efficiency and distributional consequences of a switch from the current German income and corporate tax system to one special variant of an intertemporally neutral tax, an extended ACE (allowance for corporate equity) corporation tax. This tax is favoured by the IFS Capital Taxes Group and was implemented in Croatia in 1994. We not only calculate the welfare consequences of introducing the ACE, but also separate the efficiency effects from intragenerational as well as intergenerational redistribution. The quantitative analysis is based on a dynamic simulation model of the Auerbach-Kotlikoff type which distinguishes between five income classes within each generation. The numerical results indicate that such a fundamental tax reform could yield enormous efficiency gains without necessarily increasing income inequality.
Subjects: 
Corporate taxation
intra- and intergenerational incidence
dynamic CGE modeling
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.