Effective Taxation of Top Incomes in Germany, 1992 - 2002

Stefan Bach (), Giacomo Corneo and Viktor Steiner

No 767, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: We analyze the taxation of top personal incomes in Germany on the basis of an integrated data file of individual tax returns and a general household survey for the years 1992 - 2002. The unique feature of this integrated data set is that it includes all taxpayers in the top percentile of the gross income distribution. We show that despite substantial tax base erosion and significant reductions of top statutory marginal tax rates, German income taxation has remained effectively progressive. The distribution of the tax burden is highly concentrated, and the effective average income tax rate of the German economic elite - the top 0.001 quantile of the gross income distribution - is about 34 percent, which is well below the legislated tax rate.

Keywords: Personal Income Tax; Taxing the Rich; Effective Progressivity (search for similar items in EconPapers)
JEL-codes: D31 H24 H26 (search for similar items in EconPapers)
Pages: 25 p.
Date: 2008
New Economics Papers: this item is included in nep-pbe and nep-pub
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Citations: View citations in EconPapers (11)

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Related works:
Working Paper: Effective Taxation of Top Incomes in Germany, 1992-2002 (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp767

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