Home >> FinanzArchiv: Public Finance Analysis, Volume 65, Number 1

Higher Tax Rates on Labor? Evidence from German Panel Data

Author: Weiss, Martin

Source: FinanzArchiv: Public Finance Analysis, Volume 65, Number 1, March 2009 , pp. 73-92(20)

Publisher: Mohr Siebeck

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Abstract:

This contribution investigates the justifiable spread between labor and capital income tax rates under a dual income tax, based on arguments put forth in Nielsen and Sørensen (1997). An efficient generalized instrumental variables estimator proposed by Hausman and Taylor (1981) is employed in a Mincer-type wage equation, which is estimated on recent data taken from the German Socio-Economic Panel. The estimated wage patterns yield approximations of the required divergence between the tax rates on labor and capital income for the case of university graduates. The required surcharges are sizable and exceed the ones prevailing under the current German income tax system.

Keywords: DUAL INCOME TAX; WAGE EQUATION; AGE-EARNINGS PROFILES

Document Type: Research article

DOI: http://dx.doi.org/10.1628/001522109X444125

Publication date: 2009-03-01

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  • FinanzArchiv founded in 1884 is one of the world's oldest professional journals in public finance.

    FinanzArchiv publishes original work from all fields of public economics which are of interest to an international readership, e.g. taxation, public debt, public goods, public choice, federalism, market failure, social policy, and the welfare state. Special emphasis is on high-quality theoretical and empirical papers on current policy issues.

    FinanzArchiv is a well-established, internationally oriented journal in the field of public economics, widely read in Europe and all over the world.

    FinanzArchiv is listed in the Social Science Citation Index (SSCI, JCR impact factor 2007 0,296), in Current Contents/Social and Behavioral Sciences, in IDEAS and RePEc (IDEAS/RePEc simple impact factor 2008 1.177), in the Journal of Economic Literature (CD and online), and in the International Bibliography of the Social Sciences.

    FinanzArchiv is a fully peer-reviewed journal committed to a prompt turnaround of submissions. No more than four months should pass between online submission of a manuscript and the editor's decision on acceptance, revision, or rejection.
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