Extent of Taxable Losses - an Empirical Analysis of Their Effect on Revenues and Distribution (Ausmaß der steuerlichen Verlustverrechnung - Eine empirische Analyse der Aufkommens- und Verteilungswirkungen)

The paper examines the extent and structure of taxable losses, their effect on revenues and distribution by means of microanalysis and microsimulation. The examination is based on the income and corporation tax statistics of the German Federal Statistical Office for the period from 1989 to 2001. Moreover, it is tried to establish a connection between the observable developments and the changes in tax law. The results of this analysis illustrate the importance of the losses for the tax revenue. Because of the substantial losses generated in the nineties and the current fiscal situation of the public households an extension of loss offset seems to be unrealistic. The results reveal also aspects of distribution which where hardly considered in the past discussion