In recent years, a lot of rules concerning government expenditures as well as tax revenues were changed in Germany. Government expenditures in relation to GDP were reduced, income tax rates were lowered and the budget deficit declined. The structure of government expenditures changed in favor of...

In recent years, a lot of rules concerning government expenditures as well as tax revenues were changed in Germany. Government expenditures in relation to GDP were reduced, income tax rates were lowered and the budget deficit declined. The structure of government expenditures changed in favor of...

The income tax rate structure introduced in 2007 was changed in 2009. The income tax rates will be lowered in 2010, too. The effects on the wage income tax revenues and on the incentives to work are analyzed. It turns out that "bracket creep" will remain a problem in Germany.