Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/95900
Authors: 
Hayo, Bernd
Uhl, Matthias
Year of Publication: 
2014
Series/Report no.: 
Joint Discussion Paper Series in Economics 20-2014
Abstract: 
Using a representative survey of the German population, this paper studies individual consumption responses to a recent payroll tax reduction. Our results show that 55% of the respondents spend the extra money, indicating considerable potential for tax changes to affect consumption and economic activity. Our analysis of the socio-demographic and economic determinants of consumption responses suggests that temporary and permanent tax changes have a similar impact, that interest rates are an important determinant of consumption responses to tax changes, and that households with higher income have a higher propensity to consume.
Subjects: 
Taxation
Consumption
Representative population survey
Germany
JEL: 
E21
E62
H30
Document Type: 
Working Paper

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