Estimating Dynamic Tax Revenue Elasticities for Germany

Koester, Gerrit; Priesmeier, Christoph

doi:10.2139/ssrn.2796877

Cited by 8 publications

(9 citation statements)

References 23 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In addition, adjustment speed to the LR equilibrium for Germany and the UK is low. In this regard, our results for Germany are in line with the findings of Koester and Priesmeier (2012), Mourre and Princen (2019), Bouthevillain et al (2001), and Boschi and d'Addona (2019).…”

Section: Base-to-gdp Elasticitiessupporting

confidence: 91%

“…For all countries, our results are below unity. Regarding LR elasticities, we find a particularly low value of 0.6 for Germany; this is similar in magnitude to that found by Mourre and Princen (2019) and Koester and Priesmeier (2012). The LR tax-to-base elasticity is 0.8 and 0.9 for the UK and the USA, respectively.…”

Section: Base-to-gdp Elasticitiessupporting

confidence: 83%

“…The authors identify the volatility of profits and tax-base deductions as important drivers of the relationship between profit growth and corporate income tax revenue and stress the necessity of controlling for discretionary measures when estimating corporate tax revenue elasticity. Koester and Priesmeier (2012) estimate the elasticities of revenues for German wage taxes, VAT, and profit taxes. For the latter category, they combine corporation tax, capital gains tax, and assessed income tax.…”

Section: Literature Reviewmentioning

confidence: 99%

“…As is standard in the narrative tax literature, we treat the phasing out of temporary provisions as a discretionary change, entering the series with the opposite sign. Note that Koester and Priesmeier (2012) use only permanent policy changes. However, temporary measures, prevalent during the financial crisis, can substantially explain quarterly changes in revenues.…”

Section: Data and Proportional Adjustmentmentioning

confidence: 99%

“…For both Germany and the UK, the LR elasticity exceeds the SR elasticity, which could be due to collection lags. However, Koester and Priesmeier (2012) note that wage revenues are generally collected with a delay of one month and the national accounts data are adjusted accordingly. Hence, tax collection lags can help explain this finding only if a significant portion of wage tax revenue is collected with a lag of more than one month.…”

Section: Base-to-gdp Elasticitiesmentioning

confidence: 99%

See 4 more Smart Citations

Estimating policy-corrected long-term and short-term tax elasticities for the USA, Germany, and the United Kingdom

2022

View full text Add to dashboard Cite

We estimate the elasticities of the most important tax categories using a new quarterly database of discretionary tax measures for the USA, Germany, and the United Kingdom over the period 1980Q1 to 2018Q2. Employing Romer and Romer’s (2009) narrative approach, we construct a policy-neutral dataset based on revenue figures from governmental records. Using this quantitative information, we are able to subtract policy-induced changes, which often are not considered in the literature. Furthermore, we estimate state-dependent elasticities. Our conclusions are as follows. (i) In Germany and the UK, long-term tax-to-base elasticities are generally higher than short-term elasticities, whereas results for the USA are mixed. (ii) Short-term base-to-output elasticities tend to be smaller than unity, whereas long-term elasticities are close to unity. (iii) German and UK tax-to-output elasticities in the short term are lower than long-term elasticities, with mixed results for the USA. (iv) For tax-to-base elasticities, we find business-cycle asymmetries across countries but not within countries. (v) For base-to-output elasticities, our results suggest few asymmetries across countries and more asymmetries across tax types. (vi) Typically, the above conclusions do not hold for corporate income tax.

show abstract

Section: Base-to-gdp Elasticitiessupporting

confidence: 91%

Section: Base-to-gdp Elasticitiessupporting

confidence: 83%

Section: Literature Reviewmentioning

confidence: 99%

Section: Data and Proportional Adjustmentmentioning

confidence: 99%

Section: Base-to-gdp Elasticitiesmentioning

confidence: 99%

See 3 more Smart Citations

Estimating policy-corrected long-term and short-term tax elasticities for the USA, Germany, and the United Kingdom

2022

View full text Add to dashboard Cite

show abstract

Who absorbs the shock? An analysis of the fiscal impact of the COVID-19 crisis on different levels of government

Dougherty

Biase

2021

Int Econ Econ Policy

View full text Add to dashboard Cite

This paper discusses the fiscal impact of the COVID-19 crisis across levels of government. It contrasts the composition of revenues and expenditures of different levels of government and their main institutional differences. For revenues, an error correction model is used to estimate the short-term elasticities of different levels of government, showing that subnational governments’ (SNGs) revenues are less sensitive to economic downturns than central governments’, mostly because SNGs tend to rely more on recurrent taxes on immovable property. For expenditures, central governments are often responsible for the bulk of expenditure on social protection, while SNGs have a higher investment-to-revenue ratio. The combination of these differences of expenditure assignment with the substantial budget and borrowing constraints that SNGs face creates a tendency towards pro-cyclicality at the subnational level and counter-cyclicality at the central level. Furthermore, in the context of the COVID-19 crisis, in order for SNGs to have the fiscal capacity for necessary measures to tackle the outbreak, central governments supported SNGs mostly through intergovernmental grants. As a consequence, central governments have absorbed most of the shock. Supplementary Information The online version contains supplementary material available at 10.1007/s10368-021-00518-1.

show abstract

How does population ageing impact on personal income taxes and social security contributions?

Prammer

2019

The Journal of the Economics of Ageing

View full text Add to dashboard Cite

Estimating Dynamic Tax Revenue Elasticities for Germany

Cited by 8 publications

References 23 publications

Estimating policy-corrected long-term and short-term tax elasticities for the USA, Germany, and the United Kingdom

Estimating policy-corrected long-term and short-term tax elasticities for the USA, Germany, and the United Kingdom

Who absorbs the shock? An analysis of the fiscal impact of the COVID-19 crisis on different levels of government

How does population ageing impact on personal income taxes and social security contributions?

Contact Info

Product

Resources

About