Fiscal Equalisation among the states in Germany

Jan Werner ()

No 02-2008, Working Papers from Institute of Local Public Finance

Abstract: Germany's fiscal federalism has undergone a process of perpetual reform. On the one hand, some tax sources that have existed up to now – the corporate income tax is a good example in this context – will shortly be phased out because of changes in the system. On the other hand the judgement by the Constitutional Court has required a renewal of Germany's equalisation system. Besides an illustration of tax sharing between the three tiers of government, the main part of this paper deals with the equalisation among the 16 federal states. In the framework of the reforming process of the "Solidarity Pact IIW, the distribution of tax revenues, vertical grants and fiscal equalisation among the federal states were newly arranged.

Keywords: Fiscal Federalism; Grants; Fiscal Autonomy; Germany (search for similar items in EconPapers)
JEL-codes: H1 H2 H7 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2008-01
New Economics Papers: this item is included in nep-acc and nep-pbe
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Citations: View citations in EconPapers (4)

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