This paper investigates the inter-temporal loss usage of tax units in Germany. Tax units that experience a loss in a year can offset that loss with positive income from adjacent year to receive a tax refund. Similar to companies, tax units can employ losses as carry-back in the year before the...

Using a large, representative sample of consumer financial transaction data, this paper studies the consumption and savings response to a permanent increase in income tax. In 2015, Singapore marginally raised the income taxes on high-income taxpayers. Using difference-in-differences regressions,...

As taxpayers typically pay low attention to a small inflation-induced bracket creep of the income tax, policy-makers tend to postpone its correction into the future. However, the fiscal illusion fades away and political pressure for a tax relief arises since after some years the cumulative...

Using an OLG model with skill uncertainty and private savings, we investigate whether an optimally designed set of public pension transfers can usefully supplement a nonlinear labor income tax as a welfare-enhancing policy instrument. We consider a Mirrleesian setting where agents' skills are...

This paper studies the (Ramsey) optimal taxation of labor income when wage inequality is rising, as has been the case in many developed economies in recent decades. The tax schedule is a linear or affine function of labor income every period. Workers are ax-ante heterogenous in their initial...

Using an OLG model with skill uncertainty and private savings, we investigate whether an optimally designed set of public pension transfers can usefully supplement a nonlinear labor income tax as a welfare-enhancing policy instrument. We consider a Mirrleesian setting where agents' skills are...

This paper contains an investigation of the effects of different means of financing government spending on economic growth, inflation, and welfare. In this setting, two different types of government spending are considered: productive expenditures which provide services to the private sector in...

The article considers the splitting of income between spouses from an economic perspective. It argues that this provision does not privilege married couples but prohibits their discrimination.

The German Constitutional Court has obliged parliament to enact an income tax law which lets the subsistence level tax-exempt. This can be done, in principle, by using a basic allowance or a zero-rated bracket. The paper discusses these alternatives.

In Germany, commuting expenses have been deductible from the income tax base for a long time. Germany’s grand coalition has now restricted this deduction. The article analyses whether or not this was justified from an economic point of view. It is shown that, in the long run, the tax treatment...