This paper shows that stricter enforcement may increase tax evasion. Individuals vote on a linear income tax, which is used to finance lump sum transfers. Individuals may evade taxes, but they have to pay fines when caught. Stricter enforcement may make redistributive taxation more attractive to the decisive voter. The tax rate and transfer may rise, which in turn may increase tax evasion. The paper ...
We analyze potential labor supply effects of a shift from the current German system of joint taxation of married couples to a system of limited real income splitting on the basis of an econometric household labor supply model embedded in a tax benefit model. Our simulation results show relatively small labor supply effects of a shift from the current system to one of limited real income splitting system. ...
We analyze optimal income taxes with deductions for work-related or consumptive goods. We consider two cases. In the first case (called a complex tax system) the tax authorities can exactly distinguish between consumptive and work-related expenditures. In the second case (called a simple tax system) this distinction is not exact. Assuming additively separable utility functions, we show that work-related ...
Background: In the next few decades the population in all EU-countries will age rapidly. This could have a major impact on the health care sector. This study analyses the effect of population ageing on utilisation in two key sectors of the health care system, namely hospital care and long-term care in Germany, up to 2020 with an outlook to 2050. Methods: Two population scenarios, one with constant, ...
We study the effect of politics on the distribution of intergovernmental grants. We consider a model where local government officials lobby the central government who in turn distributes grants based on the local governments' lobbying efforts. We argue that the marginal costs of lobbying increase with the geographical and "political" distance from the central government capital. Hence, in equilibrium, ...
A first systematic, model-based analysis of the environmental fiscal reform in Germany is undertaken with an econometric model and an empirical general equilibrium model. It indicates moderate but slightly positive effects on employment, energy consumption and CO2 emissions. The influence on economic growth is very low; employment is growing slightly, while energy consumption and CO2 emissions are ...
