Elemente einer grundlegenden Reform für das Steuer- und Abgabensystem in Deutschland

Florian Dorn, Clemens Fuest, Florian Neumeier, Andreas Peichl and Pascal Zamorski

in ifo Forschungsberichte from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: Elements of a Comprehensive Reform of the Tax and Contribution System in GermanyGermany's economic weakness is currently at the center of political discussions. High tax and contribution burdens, excessive bureaucracy, and an inefficient transfer system weigh equally on businesses and private households. These structural deficiencies hinder growth and the competitiveness of the German economy while exacerbating social inequalities and economic uncertainties. This report analyzes the key weaknesses of the German tax and contribution system and develops concrete reform proposals aimed at strengthening labor incentives, promoting investments, and ensuring a fairer distribution of the tax burden. The focus is on reducing the direct tax burden, particularly on income and corporate taxes, and eliminating inefficiencies in the transfer system. For example, a reduction in corporate taxes combined with simplified depreciation rules could boost investments. Simultaneously, lowering income tax brackets for low and middle incomes, reforming spousal splitting, and bundling all transfer payments with lower withdrawal rates could lead to higher employment and a fairer distribution of the tax burden. In the area of wealth taxation, a targeted adjustment of inheritance tax could create a fairer tax structure without jeopardizing investment willingness. The reform proposals emphasize revenue neutrality, for example, through moderate adjustments to indirect taxes and the elimination of inefficient subsidies. Furthermore, reducing bureaucracy and digitalizing tax administration are highlighted as keys to creating a more efficient and transparent tax system.

Date: 2024
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