Horizontal Equity in the German Tax-Benefit System: A Simulation Approach for Employees

Timm Bönke and Sebastian Eichfelder

FinanzArchiv: Public Finance Analysis, 2010, vol. 66, issue 3, 295-331

Abstract: We analyze the distributive justice of the combined burden of taxes, social security contributions, and public transfers on employee households. Comparing eight different household types, we utilize the concept of horizontal equity regarding the treatment of families in the German tax-benefit system. Applying system-inherent equivalence scales, we find evidence for a structural discrimination against low-income families, while high-income earners tend to be privileged. Therefore, we can state a significant contradiction of value judgments between the social welfare system and the German tax and social security legislation.

Keywords: horizontal equity; family taxation; distributive justice; tax-benefit system; equivalent income (search for similar items in EconPapers)
JEL-codes: D31 D63 H24 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (3)

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DOI: 10.1628/001522108X538264

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