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Income Taxation and Household Size: Would French Family Splitting Make German Families Better Off?

Alexandre Baclet (), Fabien Dell () and Katharina Wrohlich ()
Additional contact information
Alexandre Baclet: INSEE
Fabien Dell: Paris School of Economics

No 1894, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper, we address the question whether family support via the income tax system is more generous in France than in Germany, as it is often claimed in the public debate. We use two micro-data sets and a micro-simulation model to compare effective average tax rates for different household types in France and Germany. Our analysis shows that the popular belief that French high income families with children face lower average tax rates than their German counterparts is true, however not due to the French Family splitting but rather to the different definitions of taxable incomes in both countries. Actually, low income families with less than three children even fare better in terms of tax relief in Germany than in France. The French system leads to lower average tax rates than the German one (over a large range of the income distribution) only for families with three children.

Keywords: income distribution; family; income taxation; France; Germany (search for similar items in EconPapers)
JEL-codes: D31 H24 J18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-pbe and nep-pub
Date: 2005-12
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