Bürgergeld: The Negative Income Tax

Krause-Junk Gerold
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Krause-Junk Gerold: Universität Hamburg, Institut für Ausländisches und Internationales Finanz- und Steuerwesen, Grindelhof 38/40, D-20146 Hamburg

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 1997, vol. 216, issue 4-5, 549-560

Abstract: This article argues that the “Bürgergeld”, a German version of the negative income tax, is not a reasonable way to integrate tax-financed social transfers with the income tax. From a systematical point of view it is shown that there is no reasonable common base for the positive and the negative income tax. But even if there were, a consistent tariff would be questionable with respect to incentives and fiscal cost. The social policy view depends on which social transfers are to be absorbed by the Bürgergeld. As a universal social policy instrument the Bürgergeld would be much too coarsely adjusted to the different social aims. On the other hand, if it is to replace only a few (of more than a hundred) social transfers it would turn out to be a rather generous transfer not much in line with the general demand for more individual responsibility. With respect to employment, the Bürgergeld may have some positive effect, if the trade unions accept it as a reason to accept lower wages within the low wage groups. But altogether again it is a much undifferentiated device for successful employment policy.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:216:y:1997:i:4-5:p:549-560

DOI: 10.1515/jbnst-1997-4-510

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