The impact of the 2008 German corporate tax reform: A dynamic CGE analysis

Rădulescu, Doina Maria; Stimmelmayr, Michael

doi:10.1016/j.econmod.2009.10.012

Cited by 30 publications

(22 citation statements)

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“…18 Radulescu and Stimmelmayr (2010) According to the Federal Ministry of Finance, the presumed financing gap of the corporate tax reform totals € 10.701 billion.…”

Section: Revenue Consequences Of the German Corporate Tax Reformmentioning

confidence: 99%

“…Besides ZEW TaxCoMM, the Federal Ministry of Finance (Bundestag (2007)) as well as Bach et al (2007) and Radulescu/Stimmelmayr (2010) provide estimates on how the reform affects tax revenues. The results put forward by Bach et al (2007) rely on the BizTax model which primarily determines the impact of tax rate cuts and trade tax regulations on tax revenues.…”

Section: Revenue Consequences Of the German Corporate Tax Reformmentioning

confidence: 99%

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Impact of Tax Rate Cut Cum Base Broadening Reforms on Heterogeneous Firms – Learning from the German Tax Reform 2008

et al. 2010

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10036.pdf Non-technical summaryThis paper presents a new corporate microsimulation model, ZEW TaxCoMM, which allows for the coherent micro-based analysis (ex ante and ex post) of reform induced revenue implications and the distribution of the tax burden between firms of different characteristics. In this paper, ZEW TaxCoMM is employed to evaluate the consequences of the 2008 German corporate tax reform.The German corporate tax reform of 2008 has brought about important cuts in corporate tax rates, which were at the same time accompanied by significant changes in the determination of the tax base for both major German corporate taxes -corporate income tax and trade tax. The reform followed the distinct and internationally prevalent pattern of tax rate cut cum base broadening. Hence, the results on the distribution of the tax burden according to firm characteristics stand exemplarily for those reforms which follow a similar pattern. Especially in view of the current economic crisis, questions on the distribution of the tax burden among firms of different characteristics have arisen and still remain at the heart of the academic and political debate in Germany and other countries.As a result, the ZEW TaxCoMM simulations show that less than 5% of all corporations did not benefit from the 2008 German corporate tax reform. The average annual relief as measured by the average decline in the effective tax burden on cash flows amounts to 2.8 percentage points for large corporations and to 6 percentage points for small corporations. Clearly, small firms benefited more. As to tax revenues, the reform induced decrease amounts to € 9.8 billion. The decline in tax revenues is more important for the corporate income tax. The trade tax thus gains fiscally in importance.Furthermore, the simulation illustrates that firms with low profitability, high debt ratio and high capital intensity benefit least from the reform. This is a consequence of the reform detaching the tax base from profits by banning the deduction of business expenses. This additionally endangers the existence of firms in times of massive economic downturn. Indeed, policy makers in Germany and other countries reacted by modifying the most harmful regulations which implied the taxation of economic worth instead of profits. Abstract: The German corporate tax reform of 2008 has brought about important cuts in corporate tax rates, w...

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“…18 Radulescu and Stimmelmayr (2010) According to the Federal Ministry of Finance, the presumed financing gap of the corporate tax reform totals € 10.701 billion.…”

Section: Revenue Consequences Of the German Corporate Tax Reformmentioning

confidence: 99%

Section: Revenue Consequences Of the German Corporate Tax Reformmentioning

confidence: 99%

Impact of Tax Rate Cut Cum Base Broadening Reforms on Heterogeneous Firms – Learning from the German Tax Reform 2008

et al. 2010

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“…Condition (11) implies that the optimal amount of foreign profits shifted abroad is determined by equating the profit tax differential, τ P,F −τ P * , to the marginal concealment cost, 25 Otherwise, retaining profits for investment increases the core equity capital and the deductibility rate, z, does not influence investment, that is ∂(F K − δ)/∂z = 0. φ (S F ). τ P * denotes the statutory profit tax rate relevant to SPCs, while τ P and τ…”

Section: Special Purpose Companies (Spcs)mentioning

confidence: 99%

“…Comprehensive documentation of the other main building blocks of the CGE model, such as unincorporated firms, households and the government sector, can be found in Radulescu and Stimmelmayr (2010) or Stimmelmayr (2007).…”

Section: The Cge Model Appliedmentioning

confidence: 99%

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Introducing an IP Licence Box in Switzerland: Quantifying the Effects

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. In response to the increasing international pressure on Switzerland to reform the ring-fenced elements in its tax system, the Swiss Government has put forward a comprehensive tax reform package. The proposal comprises, among other things, the introduction of a licence box, a substantial reduction in the cantonal profit tax rates and an allowance for excess corporate equity. We apply a computable general equilibrium model to quantify the economic effects of this reform. Our results reveal that the licence box, combined with the reduction in the cantonal profit tax, limits the outflow of the tax base of those companies that benefit from the current preferential tax treatment. The reduction in the cantonal profit tax and the fact that regularly taxed companies also benefit from the licence box render the reform package costly, such that the tax revenues will decline after the reform. Terms of use: Documents inJEL-Code: H250, H320, C680.

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Green and Blue Dividends and Environmental Tax Reform: Dynamic CGE Model

Severini

Pretaroli

Socci

2018

The New Generation of Computable General Equilibrium Models

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The impact of the 2008 German corporate tax reform: A dynamic CGE analysis

Cited by 30 publications

References 30 publications

Impact of Tax Rate Cut Cum Base Broadening Reforms on Heterogeneous Firms – Learning from the German Tax Reform 2008

Impact of Tax Rate Cut Cum Base Broadening Reforms on Heterogeneous Firms – Learning from the German Tax Reform 2008

Introducing an IP Licence Box in Switzerland: Quantifying the Effects

Green and Blue Dividends and Environmental Tax Reform: Dynamic CGE Model

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