This paper investigates the effects of implementing a dual income tax (DIT) in Germany. We follow the reform proposal of the German Council of Economic Advisors(2003) and analyze its implications on capital formation, investment and welfare using a dynamic computable general equilibrium model....

This dissertation consists of six self-contained chapters that are related to the behavior of firms and politicians in a broader sense. After an introduction to the topic, the first part of the dissertation elaborates on how institutional and political framework conditions influence the behavior...

We investigate the impact of corporate taxation on capital stock. In the paper, we indicate that corporate taxation might not only distort the decision of each firm to invest but could also destroy firms. With this in mind, we estimate capital demand equations, correcting for self-selection in...

In the spirit of Harberger, we apply a dynamic computable general equilibrium (CGE) model and estimate the excess burden stemming from the tax-induced distortion in the allocation of capital across the corporate and the non-corporate sectors in Germany. In doing so, we perform a counterfactual...

This paper outlines two potential approaches to incorporating business taxation and allowances into a model of a firm to determine the effect of tax policy changes on the firm's behaviour. Following Auerbach, King and Benge, we first develop a model in which the firm maximises the value of its...

The paper addresses the question whether the preferential treatment of retained earnings according to section 34a EStG is suitable to achieve a comparable tax burden of partnerships and corporations. To calculate the tax burden on retained earnings requires the combination of the progressive...

Proposal: Treat profits and losses symmetrically so that the taxing authority shares in losses in the same proportion as it shares in profits. Just as companies making profits pay a share of those profits in taxes, companies make losses would receive a subsidy or negative tax from the government...

This paper investigates the effects of implementing a dual income tax (DIT) in Germany. We follow the reform proposal of the German Council of Economic Advisors(2003) and analyze its implications on capital formation, investment and welfare using a dynamic computable general equilibrium model....