Assessment of the Distribution Effects of the 'Red-Green' Income Tax Policy - A Matter of Scale (Beurteilung der Verteilungswirkungen der "rot-Grünen" Einkommensteuerpolitik - Eine Frage des Maßstabs -)

Abstract

With an empirical study of the results of the reduction in the income tax schedule by the German red-green government two suitable scales for an evaluation of distributional effects of tax policy are discussed: the redistribution of tax burden and the redistribution of income caused by the analysed tax reform. It is shown, which influence the choice of the assessment scale has for the interpretation of the results. It is brought out that an evaluation focussed on net distribution of income alone is problematic because the implication of such a fiscal policy is in conflict with the primary tasks of income taxation. The redistribution effects regarding tax burdens seem to be more suitable for the assessment of distributional effects of changes in tax law.