Wirkungen einer Abgeltungssteuer auf Investitionsentscheidungen und Kapitalstruktur von Unternehmen

Effects of a flat rate tax on investment decisions and capital structure of companies

Dirk Kiesewetter and Andreas Lachmund

MPRA Paper from University Library of Munich, Germany

Abstract: Recently, there have been various proposals in Germany to exempt interest income of individuals from progressive income taxation, and to levy a flat source tax, instead. The isolated introduction of a flat tax on interest income would have a significant effect on all investment and financing decisions of investors in individual enterprises, partnerships and corporations. Any equity-financed investment subject to regular taxation would become relatively less attractive compared to interest income subject to the flat tax. This paper analyzes the possible impact of a flat rate tax on business decisions in the context of the German income and corporation tax (sections 2 and 3). Proposals for changes in corporate taxation are developed to avoid the undesired effects of a flat tax on financing decisions (section 4). In particular we show that this is possible without lowering the tax burden on corporate profits to the level of the flat rate tax.

Keywords: Abgeltungssteuer; Unternehmensbesteuerung; Finanzierungsentscheidungen (search for similar items in EconPapers)
JEL-codes: H21 H25 (search for similar items in EconPapers)
Date: 2004-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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