Dr. Florian Neumeier

The ifo Institute has proposed a fundamental reform of the German tax and contribution system. “Companies need impetus for investment and growth, and more work must be more worthwhile for households. Many regulations, exceptions and privileges, on the other hand, should be abolished, as they lead to more bureaucracy and hamper growth,” says ifo President Clemens Fuest, adding that a reform is necessary in view of the high tax burden compared to other countries.

The OECD’s proposals for reforming international corporate taxation will bring Germany additional tax revenue of EUR 2.4–3.4 billion per year. This is the result of the ifo Institute’s calculations on behalf of the German Federal Ministry of Finance. “According to our estimates, Germany would be a beneficiary of the reform. But the increase in additional tax revenue would be rather moderate,” says Florian Neumeier, Head of the ifo Research Group Taxation and Fiscal Policy.

Economic sanctions induce considerable economic damage in the target countries. Sanctions by the United Nations cause growth in sanctioned countries to decline by 2 percentage points annually. Extrapolated over ten years, this is equivalent to a 25 percent drop in per capita economic output. Unilateral sanctions by the US lead to an annual decline in growth of almost 1 percentage point in the countries affected. In the long term, this corresponds to a 13 percent slump in the economy’s output per capita.

The fuel discount for diesel and gasoline in Germany has essentially been passed on to customers, according to calculations by the ifo Institute. “In the case of diesel, filling stations passed on 100 percent of the discount, so the full 17-cent tax cut per liter. For premium gasoline, it was 29 to 30 cents of the 35-cent tax cut, or 85 percent,” says Florian Neumeier of the ifo Institute, who prepared the calculations together with Daniel Stöhlker and ifo President Clemens Fuest. 

Around 66 percent of German households are in favor of raising the top tax rate to finance climate action. This is the finding of an ifo study based on a survey in which German households were asked about their preferences with regard to financing climate change policies.

Florian Dorn, Clemens Fuest, Florian Neumeier und Niklas Potrafke zeigen in einer neuen Studie, dass Unternehmer, die politische Mandate übernehmen, andere Schwerpunkte in der Wirtschaftspolitik setzen und das Wirtschaftswachstum stärker beeinflussen als Politiker mit einem anderen beruflichen Werdegang.