The rate of return in a PAYG pension system is typically lower than in a funded system. This lower rate of return generates a loss for the contributors which basically acts like an implicit income tax. In this paper, we argue that the implicit income tax is an excellent measure with which to...

In 2009, German federal fiscal relationships were reorganized in order to introduce binding rules for a reduction of public deficits. One element of this reform are so called "consolidation transfers" for heavily indebted states as an measure to reduce debt. In turn, receiving states have to run...