tax, and that the government, after a transitional period ending in 1995, has to change the tax rules accordingly. The … already high levels of the budget deficit and public debt do not allow a generous calculation of the tax free subsistence … level with incentive-compatible marginal tax rates. The paper compares the most important reform proposals with respect to …

The German government intends to fix the yearly income tax free subsistence level for a single in 1996 at an amount of … 12.000 marks. Own calculations show a minimium of 13.000 marks. They also show that the planned level for the tax … allowance for each child of 6.264 marks is sufficient at least for a short period. A reduction of the common tax allowance of a …