The article deals with the earnings stripping rule (or interest barrier), an important part of the German company tax act 2008. The new rule is analyzed both from an economic and a legal perspective.

The article analyses the incentive effects of the German system of intergovernmental grants.

Mirrlees' optimal income tax formula has never been proven rigorously, and it is hard to understand it in economic terms. We prove an analogous formula for an economy with finitely many persons. This is easy and allows a simple economic interpretation. Thereafter, Mirrlees' original formula is...

The paper evaluates the theoretical literature on public pension schemes. First, the terms pay-as-you-go and capital reserve are made precise. These two systems are then compared, followed by a consideration of their efficiency properties. Thereafter conversion policies are discussed.

Public pension schemes can be designed either as capital reserve systems or as unfunded (or pay-as-you-go) schemes. In the literature it has been alleged that unfunded schemes are intergenerationally efficient in Pareto's sense. Here we show that this holds only if contributions to the system...

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...

Der Artikel vergleicht die klassische und die zinsbereinigte Einkommensteuer. Es wird argumentiert, dass die klassische Einkommensteuer in mehrfacher Hinsicht überlegen ist.

Recent proposals for capital income tax reform are considered. The analysis focusses on German taxes, but experiences from abroad as well as the European Savings Directive are also taken into account. Given the present complexity of capital income taxation, the crucial question is whether or not...

The article discusses possible implications of European Monetary Union (EMU) on member states' budget policies. It predicts that the non-bail-out clause will not work.

The article analyzes the impact of the Tax Reform Act 2008 on financial decisions of incorporated and unincorporated firms.