Auswirkungen verschiedener Varianten einer negativen Einkommensteuer in Deutschland

First, the author provides a thorough analysis of the present tax-transfer system in Germany that reveals significant weaknesses particularly with respect to incentives. The alternative of a negative income tax is discussed with a special focus on problems with practical implementation, and different schemes are specified. The fiscal cost of introducing such schemes is calculated, including effects that can be expected from changes in individual behavior. The main result is that the introduction of a negative income tax can only be recommended when it is combined with a reduction of the guaranteed minimum income. However, even in this case it remains doubtful whether a negative income tax is compatible with the main principles of tax policy and social policy prevalent in Germany.