Introducing Family Tax Splitting in Germany: How Would It Affect the Income Distribution, Work Incentives, and Household Welfare? - 10.1628/001522108X312096 - Mohr Siebeck
Economics

Viktor Steiner, Katharina Wrohlich

Introducing Family Tax Splitting in Germany: How Would It Affect the Income Distribution, Work Incentives, and Household Welfare?

Section: Fiscal Policy in Action
FinanzArchiv (FA)

Volume 64 () / Issue 1, pp. 115-142 (28)

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We analyze the effects of three different proposals to introduce a family tax-splitting system in Germany. The empirical analysis is based on a behavioral microsimulation model, which integrates an empirical household labor-supply model into a detailed tax-benefit model. Our results show that, under each reform, the lion's share of the reduction in taxes would accrue to families in the upper part of the income distribution, and that labor-supply effects are small. If budgetary balance were financed by a reduction of the child benefit, our results suggest that none of the reforms would be welfare-improving.
Authors/Editors

Viktor Steiner No current data available.

Katharina Wrohlich No current data available.