Michael Stimmelmayr

Investors' Portfolio Choice and Tax Reforms: The 2008 German Corporate Tax Reform Reconsidered

Section: Fiscal Policy in Action
FinanzArchiv (FA)

Volume 74 () / Issue 3, pp. 376-413 (38)

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The paper provides a comprehensive assessment of the growth and welfare effects of the 2008 German corporate tax reform, which entails a shift of the capital tax burden from the firm to the household level. Using a dynamic two-country computable general-equilibrium model with integrated capital markets, the results indicate a faint growth stimulus of the reform and a negative effect on domestic welfare. In fact, the reform increased the double taxation of equity-financed corporate investment, thereby impeding firms' investment. Further, the reform-induced tax incentives for foreigners to invest in German equity undermines the financing of the reform.

Michael Stimmelmayr Geboren 1978; Studium der VWL in München; 2006 Promotion an der Universität München bei Hans-Werner Sinn; seit 2006 Assistenzprofessur am Center for Economic Studies (CES) an der Universität München.