Top Incomes and Top Taxes in Germany

Stefan Bach (), Giacomo Corneo and Viktor Steiner

No 1641, CESifo Working Paper Series from CESifo

Abstract: We analyze the distribution and taxation of top incomes in Germany during the 1990s on the basis of individual tax returns data. We derive a measure of economic income from taxable gross income as reported in the tax returns. Thanks to complete sampling, we can deliver a very precise description of very high incomes, in terms of both distribution and composition by source. We also provide a measure of the effective average rate of taxation for various income groups. Our main findings are as follows: (i) incomes are highly concentrated in Germany, more than commonly thought; (ii) the German economic elite relies much less than elites in France or the US upon income from wages and salaries; (iii) income taxes are highly concentrated in Germany, more than commonly thought; (iv) although effective tax rates are significantly lower than statutory ones, the income tax is effectively progressive; (v) income taxation substantially reduces income inequality in Germany.

Keywords: income distribution; personal income tax; taxing the rich (search for similar items in EconPapers)
JEL-codes: D31 H24 H26 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Working Paper: Top Incomes and Top Taxes in Germany (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1641

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