German municipalities have substantial autonomy in setting taxes on two distinct tax bases: business profits and property values. We use this setting and a two-step approach to explore whether implemented tax policy is consistent with the seminal inverse-elasticity rule. First, we estimate the tax elasticity of the two tax bases using event-study and generalized differences-in-differences methods based on the universe of municipalities in 1995-2010. Second, we compare the ratio of the observed tax rates for the two tax bases to the ratio of their estimated elasticities. We find that property is not very responsive to variation in tax rates, whereas business profits respond significantly. While this would suggest that property should be taxed at a higher rate, the data show that this not the case: most municipalities impose relatively higher rates on business profits. This suggests that municipality-level taxation in Germany is inconsistent with the inverse-elasticity rule. We provide suggestive evidence that this finding is explained by politician's imprecise expectations about revenue elasticities as well as re-election concerns.
{"title":"Higher Taxes on Less Elastic Goods? Evidence from German Municipalities","authors":"Sebastian Blesse, Philipp Doerrenberg, Anna Rauch","doi":"10.2139/ssrn.3251730","DOIUrl":"https://doi.org/10.2139/ssrn.3251730","url":null,"abstract":"German municipalities have substantial autonomy in setting taxes on two distinct tax bases: business profits and property values. We use this setting and a two-step approach to explore whether implemented tax policy is consistent with the seminal inverse-elasticity rule. First, we estimate the tax elasticity of the two tax bases using event-study and generalized differences-in-differences methods based on the universe of municipalities in 1995-2010. Second, we compare the ratio of the observed tax rates for the two tax bases to the ratio of their estimated elasticities. We find that property is not very responsive to variation in tax rates, whereas business profits respond significantly. While this would suggest that property should be taxed at a higher rate, the data show that this not the case: most municipalities impose relatively higher rates on business profits. This suggests that municipality-level taxation in Germany is inconsistent with the inverse-elasticity rule. We provide suggestive evidence that this finding is explained by politician's imprecise expectations about revenue elasticities as well as re-election concerns.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130147829","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The elasticity of taxable income (ETI) is a key parameter in income tax analysis both in terms of efficiency and tax revenue. This paper uses Finnish panel data to analyze ETI. I use changes in flat municipal income tax rates as an instrument for overall changes in marginal tax rates. This instrument is not a function of individual income, which is the basis for an exogenous instrument. In general, instruments used in previous studies do not have this feature. My preferred estimate for the average ETI is 0.16. The preferred specification includes extensive regional and individual controlling. Earlier version of this paper was published in February 2014 ("Taxable income elasticity and the anatomy of behavioral response: Evidence from Finland" Government Institute for Economic Research (VATT) Working Papers 55).
{"title":"Elasticity of Taxable Income: Evidence from Changes in Municipal Income Tax Rates in Finland","authors":"Tuomas Matikka","doi":"10.1111/sjoe.12236","DOIUrl":"https://doi.org/10.1111/sjoe.12236","url":null,"abstract":"The elasticity of taxable income (ETI) is a key parameter in income tax analysis both in terms of efficiency and tax revenue. This paper uses Finnish panel data to analyze ETI. I use changes in flat municipal income tax rates as an instrument for overall changes in marginal tax rates. This instrument is not a function of individual income, which is the basis for an exogenous instrument. In general, instruments used in previous studies do not have this feature. My preferred estimate for the average ETI is 0.16. The preferred specification includes extensive regional and individual controlling. Earlier version of this paper was published in February 2014 (\"Taxable income elasticity and the anatomy of behavioral response: Evidence from Finland\" Government Institute for Economic Research (VATT) Working Papers 55).","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121076188","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Financialization, climate change, growing inequality and digitalization are some of the major challenges of today's world. Neoliberal economic and social order is underlying the creation and growth of these problems, Catholic Social Teaching could be an alternative to a more just, fair and sustainable world by, among others, make better use of taxation and tax related instruments. The focus is on the European Union.
{"title":"Taxation and Transformation. The Use and Usefulness of Catholic Social Teaching, Tax and Tax Related Instruments to Advance Systemic Change - Short Version","authors":"J. Alt","doi":"10.2139/ssrn.3277282","DOIUrl":"https://doi.org/10.2139/ssrn.3277282","url":null,"abstract":"Financialization, climate change, growing inequality and digitalization are some of the major challenges of today's world. Neoliberal economic and social order is underlying the creation and growth of these problems, Catholic Social Teaching could be an alternative to a more just, fair and sustainable world by, among others, make better use of taxation and tax related instruments. The focus is on the European Union.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123503926","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Filomena Garcia, Luca David Opromolla, A. Vezzulli, Rafael Marques
The administration of tax policy has shifted its focus from enforcement to complementary instru-ments aimed at creating a social norm of tax compliance. In this paper we provide an analysis of the effects of the dissemination of information regarding the past degree of tax evasion at the social level on the current individual tax compliance behavior. We build an experiment where, for given levels of audit probabilities, fines and tax rates, subjects have to declare their income after receiving either a communication of the official average tax evasion rate or a private message from a group of ran-domly matched peers about their tax behavior. We use the experimental data to estimate a dynamic econometric model of tax evasion. The econometric model extends the Allingham–Sandmo–Yitzhaki tax evasion model to include self-consistency and endogenous social interactions among taxpayers. We find four main results. First, tax compliance is very persistent. Second, the higher the official past tax evasion rate the higher the degree of persistence: evaders are more likely to evade again, and compli-ant individuals are more likely to comply again. Third, when all peers communicate to have evaded (complied) in the past, both evaders and compliant individuals are more likely to evade (comply). Fourth, while both treatments, and especially the unofficial information treatment, are associated, in the context of our experiment, with a significantly larger growth in evasion intensity, the aggregate effect depends on the characteristics of the population. In countries with inherently low levels of tax evasion, official information can have beneficial effects by consolidating the behavior of compliant individuals. However, in countries with inherently high levels of tax evasion, official information can have detrimental effects by intensifying the behavior of evaders. In both cases, the impact of official information is magnified in the presence of strong peer effects.
{"title":"The Effects of Official and Unofficial Information on Tax Compliance","authors":"Filomena Garcia, Luca David Opromolla, A. Vezzulli, Rafael Marques","doi":"10.2139/ssrn.3166305","DOIUrl":"https://doi.org/10.2139/ssrn.3166305","url":null,"abstract":"The administration of tax policy has shifted its focus from enforcement to complementary instru-ments aimed at creating a social norm of tax compliance. In this paper we provide an analysis of the effects of the dissemination of information regarding the past degree of tax evasion at the social level on the current individual tax compliance behavior. We build an experiment where, for given levels of audit probabilities, fines and tax rates, subjects have to declare their income after receiving either a communication of the official average tax evasion rate or a private message from a group of ran-domly matched peers about their tax behavior. We use the experimental data to estimate a dynamic econometric model of tax evasion. The econometric model extends the Allingham–Sandmo–Yitzhaki tax evasion model to include self-consistency and endogenous social interactions among taxpayers. We find four main results. First, tax compliance is very persistent. Second, the higher the official past tax evasion rate the higher the degree of persistence: evaders are more likely to evade again, and compli-ant individuals are more likely to comply again. Third, when all peers communicate to have evaded (complied) in the past, both evaders and compliant individuals are more likely to evade (comply). Fourth, while both treatments, and especially the unofficial information treatment, are associated, in the context of our experiment, with a significantly larger growth in evasion intensity, the aggregate effect depends on the characteristics of the population. In countries with inherently low levels of tax evasion, official information can have beneficial effects by consolidating the behavior of compliant individuals. However, in countries with inherently high levels of tax evasion, official information can have detrimental effects by intensifying the behavior of evaders. In both cases, the impact of official information is magnified in the presence of strong peer effects.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125910730","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We explore the case for and against an annual wealth tax as part of the overall tax mix. Few countries now use wealth taxes, and those that do adopt narrow tax bases. Taxes on inheritances or bequest are more common, but they generate limited revenue and apply to relatively few taxpayer. In principle, annual wealth taxes are roughly equivalent to capital income taxes on the assets to which they apply, although there are some assets for which wealth taxes might be simpler to implement than capital income taxes. Annual wealth taxes are distinct in purpose from inheritance taxes which are useful adjuncts to income taxes even if capital income is exempt. We recount the persuasive arguments for taxing capital income, albeit at different rates than for other income, and for taxing inheritances regardless of whether capital income is taxed. We argue that if the desire to tax asset income and wealth transfers is appropriately addressed by capital income and inheritance taxation, the additional need for an annual wealth tax is minimal and its benefits do not outweigh its administrative costs.
{"title":"The Tenuous Case for an Annual Wealth Tax","authors":"Robin Boadway, P. Pestieau","doi":"10.2139/ssrn.3123835","DOIUrl":"https://doi.org/10.2139/ssrn.3123835","url":null,"abstract":"We explore the case for and against an annual wealth tax as part of the overall tax mix. Few countries now use wealth taxes, and those that do adopt narrow tax bases. Taxes on inheritances or bequest are more common, but they generate limited revenue and apply to relatively few taxpayer. In principle, annual wealth taxes are roughly equivalent to capital income taxes on the assets to which they apply, although there are some assets for which wealth taxes might be simpler to implement than capital income taxes. Annual wealth taxes are distinct in purpose from inheritance taxes which are useful adjuncts to income taxes even if capital income is exempt. We recount the persuasive arguments for taxing capital income, albeit at different rates than for other income, and for taxing inheritances regardless of whether capital income is taxed. We argue that if the desire to tax asset income and wealth transfers is appropriately addressed by capital income and inheritance taxation, the additional need for an annual wealth tax is minimal and its benefits do not outweigh its administrative costs.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132691991","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
D. Sologon, Philippe Van Kerm, Jinjing Li, C. O’Donoghue
This paper proposes a framework for studying international differences in the distribution of household income. Integrating micro-econometric and micro-simulation approaches in a decomposition analysis it quantifies the role of tax-benefit systems, employment and occupational structures, labour prices and market returns, and demographic composition in accounting for differences in income inequality across countries. Building upon EUROMOD (the European tax-benefit calculator) and its harmonized datasets, the model is portable and can be implemented for any cross-country comparisons within the EU. An application to the UK and Ireland—two countries that have much in common while displaying different levels of inequality—shows that differences in tax-benefit rules between the two countries account for roughly half of the observed difference in disposable household income inequality. Demographic differences play negligible roles. The Irish tax-benefit system is more redistributive than UK’s due to a higher tax progressivity and higher average transfer rates. These are largely attributable to policy parameter differences, but also to differences in pre-tax, pre-transfer income distributions.
{"title":"Accounting for Differences in Income Inequality across Countries: Ireland and the United Kingdom","authors":"D. Sologon, Philippe Van Kerm, Jinjing Li, C. O’Donoghue","doi":"10.2139/ssrn.3105339","DOIUrl":"https://doi.org/10.2139/ssrn.3105339","url":null,"abstract":"This paper proposes a framework for studying international differences in the distribution of household income. Integrating micro-econometric and micro-simulation approaches in a decomposition analysis it quantifies the role of tax-benefit systems, employment and occupational structures, labour prices and market returns, and demographic composition in accounting for differences in income inequality across countries. Building upon EUROMOD (the European tax-benefit calculator) and its harmonized datasets, the model is portable and can be implemented for any cross-country comparisons within the EU. An application to the UK and Ireland—two countries that have much in common while displaying different levels of inequality—shows that differences in tax-benefit rules between the two countries account for roughly half of the observed difference in disposable household income inequality. Demographic differences play negligible roles. The Irish tax-benefit system is more redistributive than UK’s due to a higher tax progressivity and higher average transfer rates. These are largely attributable to policy parameter differences, but also to differences in pre-tax, pre-transfer income distributions.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132061523","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
G. Poniatowski, M. Bonch-Osmolovskiy, Misha V. Belkindas
This analysis serves as the Final Report for the DG TAXUD Project 2015/CC/131, “Study and Reports on the VAT Gap in the EU-28 Member States”, which is a follow up to the reports published in 2013, 2014, 2015, and 2016. We present new estimates of the VAT Gap and the Policy Gap for the year 2015, as well as updated estimates for the years 2011?2014. This report provides first estimates of the VAT Gap for Cyprus, using the newly revised national accounts data from the Cyprus Statistical Agency. The VAT Gap is the difference between the amount of VAT revenue actually collected and the theoretical amount that is expected to be collected, given the observed information on the country’s economy and the actual VAT legislation. The amount of VAT total theoretical liability, known as VTTL, is calculated using the so-called “top-down” approach: the national VAT rate structure is imposed on the national accounts expenditure and investment data at the most detailed level possible to derive expected liability
{"title":"Study and Reports on the VAT Gap in the EU-28 Member States: 2017 Final Report","authors":"G. Poniatowski, M. Bonch-Osmolovskiy, Misha V. Belkindas","doi":"10.2139/ssrn.3064726","DOIUrl":"https://doi.org/10.2139/ssrn.3064726","url":null,"abstract":"This analysis serves as the Final Report for the DG TAXUD Project 2015/CC/131, “Study and Reports on the VAT Gap in the EU-28 Member States”, which is a follow up to the reports published in 2013, 2014, 2015, and 2016. We present new estimates of the VAT Gap and the Policy Gap for the year 2015, as well as updated estimates for the years 2011?2014. This report provides first estimates of the VAT Gap for Cyprus, using the newly revised national accounts data from the Cyprus Statistical Agency. The VAT Gap is the difference between the amount of VAT revenue actually collected and the theoretical amount that is expected to be collected, given the observed information on the country’s economy and the actual VAT legislation. The amount of VAT total theoretical liability, known as VTTL, is calculated using the so-called “top-down” approach: the national VAT rate structure is imposed on the national accounts expenditure and investment data at the most detailed level possible to derive expected liability","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-10-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125327172","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate how tax loss offset restrictions affect an investor's evaluation of risky investments under bounded rationality. We analytically identify behavioral tax effects for different levels of loss offset restrictions, tax rate and prospect theoretical biases (loss aversion, probability weighting and reference dependence) and find tax loss offset restrictions significantly bias investor perception, even more heavily than the tax rate. If loss offset restrictions are rather generous, investors are very loss averse or assign a huge weight to loss probabilities, taxation is likely to increase the preference value of risky investments (behavioral tax paradox). Surprisingly, the identified significant perception biases of tax loss offset restrictions occur under both high and low tax rates and thus are relatively insensitive to tax rate changes. Finally, we identify huge differences in behavioral tax effects across countries indicating that tax loss offset restrictions crucially determine the perceived tax quality of a country for risky investments. Our analysis is relevant for policy makers discussing future tax reforms as well as for investors assessing risky investment opportunities.
{"title":"Tax Loss Offset Restrictions and Biased Perception of Risky Investments","authors":"A. Mehrmann, Caren Sureth-Sloane","doi":"10.2139/ssrn.3046543","DOIUrl":"https://doi.org/10.2139/ssrn.3046543","url":null,"abstract":"We investigate how tax loss offset restrictions affect an investor's evaluation of risky investments under bounded rationality. We analytically identify behavioral tax effects for different levels of loss offset restrictions, tax rate and prospect theoretical biases (loss aversion, probability weighting and reference dependence) and find tax loss offset restrictions significantly bias investor perception, even more heavily than the tax rate. If loss offset restrictions are rather generous, investors are very loss averse or assign a huge weight to loss probabilities, taxation is likely to increase the preference value of risky investments (behavioral tax paradox). Surprisingly, the identified significant perception biases of tax loss offset restrictions occur under both high and low tax rates and thus are relatively insensitive to tax rate changes. Finally, we identify huge differences in behavioral tax effects across countries indicating that tax loss offset restrictions crucially determine the perceived tax quality of a country for risky investments. Our analysis is relevant for policy makers discussing future tax reforms as well as for investors assessing risky investment opportunities.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124149098","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Ángel Cuevas, R. Cuevas, A. Lassmann, Federica Liberini, António Russo
We study the effects of the taxation of digital platforms on the online advertising market. We exploit novel data on daily unit prices of Facebook ads targeted to country-specific audiences, collected around a major change in the firm's accounting practices following the introduction of the UK Diverted Profit Tax. We show that a substantial increase in ads prices followed such change, although with heterogeneous intensity across countries. These results are in line with a model of a platform operating in the global advertising market. We show that taxation of profits generated in one country makes the price charged to advertisers from that country (resp. other countries) increase (decrease). Accordingly, we demonstrate that aggregate advertising prices in OECD countries increased more, after the policy change, the larger is the market share of UK-based advertisers.
{"title":"The Taxman Calls. How Does Facebook Answer? Global Effects of Taxation on Online Advertising","authors":"Ángel Cuevas, R. Cuevas, A. Lassmann, Federica Liberini, António Russo","doi":"10.2139/ssrn.3049361","DOIUrl":"https://doi.org/10.2139/ssrn.3049361","url":null,"abstract":"We study the effects of the taxation of digital platforms on the online advertising market. We exploit novel data on daily unit prices of Facebook ads targeted to country-specific audiences, collected around a major change in the firm's accounting practices following the introduction of the UK Diverted Profit Tax. We show that a substantial increase in ads prices followed such change, although with heterogeneous intensity across countries. These results are in line with a model of a platform operating in the global advertising market. We show that taxation of profits generated in one country makes the price charged to advertisers from that country (resp. other countries) increase (decrease). Accordingly, we demonstrate that aggregate advertising prices in OECD countries increased more, after the policy change, the larger is the market share of UK-based advertisers.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115213545","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A common assumption in the optimal taxation literature is that the social planner maximizes a welfarist social welfare function with weights decreasing with income. However, high transfer withdrawal rates in many countries imply very low weights for the working poor in practice. We reconcile this puzzle by generalizing the optimal taxation framework by Saez (2002) to allow for alternatives to welfarism. We calculate weights of a social planner's function as implied by the German tax and transfer system based on the concepts of welfarism, minimum absolute and relative sacrifice, as well as subjective justness. For the latter we use a novel question from the German Socio-Economic Panel. We find that the minimum absolute sacrifice principle is in line with social weights that decline with net income. Absolute subjective justness is roughly in line with decreasing social weights, which is reflected by preferences of men, West Germans, and supporters of the grand coalition parties.
{"title":"Optimal Taxation Under Different Concepts of Justness","authors":"Robin Jessen, M. Metzing, Davud Rostam‐Afschar","doi":"10.2139/ssrn.3169875","DOIUrl":"https://doi.org/10.2139/ssrn.3169875","url":null,"abstract":"A common assumption in the optimal taxation literature is that the social planner maximizes a welfarist social welfare function with weights decreasing with income. However, high transfer withdrawal rates in many countries imply very low weights for the working poor in practice. We reconcile this puzzle by generalizing the optimal taxation framework by Saez (2002) to allow for alternatives to welfarism. We calculate weights of a social planner's function as implied by the German tax and transfer system based on the concepts of welfarism, minimum absolute and relative sacrifice, as well as subjective justness. For the latter we use a novel question from the German Socio-Economic Panel. We find that the minimum absolute sacrifice principle is in line with social weights that decline with net income. Absolute subjective justness is roughly in line with decreasing social weights, which is reflected by preferences of men, West Germans, and supporters of the grand coalition parties.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117176997","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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