Elements of a Fundamental Reform of the Tax and Duty System in Germany

Tasks

Germany's economy is stagnating, while other major economies have already set the course for recovery and growth. This is not just an economic problem, but a fundamental structural problem for Germany as a business location. Uncertainty about economic policy decisions is high among companies and investment in the location is being held back. Germany's attractiveness suffers not only from higher energy costs and bureaucratic burdens, but also from a high tax burden on companies and households compared with other countries. The income tax and transfer system also reduces the incentives for many people to work and perform. Against the background of an ageing society, a declining volume of work and an increasing shortage of skilled labour, the potential for employment must be better exploited in the future. In order to make work and better performance more rewarding, to make the country more attractive for business investment and to stimulate growth, tax relief and tax policy reforms are being discussed by many sides.

In the tax policy debate, individual measures are often taken more or less arbitrarily. However, the tax policy debate should be conducted on a broader basis as part of a comprehensive tax policy debate. The aim of this study is therefore to discuss the basic elements of a comprehensive reform proposal for the tax and contribution system in Germany.