The Effect of Inflation on Real Taxation (Der Einfluss Der Inflation Auf Die Reale Besteuerung Von Einkommen)

16 Pages Posted: 7 May 2009 Last revised: 3 Jun 2009

Rainer Maurer

Pforzheim University

Date Written: April 2009

Abstract

In this paper the effect of inflation on the real taxation of income in Germany is analyzed. The results show that the effect of inflation on real marginal tax rates is quantitatively strong. As a consequence, ex ante real tax rates become stochastic. However, the effect differs between labor and capital income. It is shown how taxation formulas can be changed in order to avoid these effects.

Notes: Downloadable document is in German.

Keywords: Inflation, Real Taxation, Abgeltungsteuer, Kalte Progression

JEL Classification: H22, H24, H26

Suggested Citation

Maurer, Rainer, The Effect of Inflation on Real Taxation (Der Einfluss Der Inflation Auf Die Reale Besteuerung Von Einkommen) (April 2009). Available at SSRN: https://ssrn.com/abstract=1398808 or http://dx.doi.org/10.2139/ssrn.1398808

Rainer Maurer (Contact Author)

Pforzheim University ( email )

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Pforzheim, D-75175
Germany
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