In this paper we develop the dynamic CGE model, ifoMod, which is designed to analyse the impact of fundamental tax reforms and in particular capital income tax reforms for Germany. The model is in line with neoclassical growth theory and features all important behavioural interactions between...

This paper analyses the switch to an ACE or to a CBIT type of tax system starting from the present German tax system. We show that in case an ACE type of reform is financed by an increase in the VAT and not in the profit tax, it might be preferred to a CBIT even in the context of an open...

In the spirit of Harberger, we apply a dynamic computable general equilibrium (CGE) model and estimate the excess burden stemming from the tax-induced distortion in the allocation of capital across the corporate and the non-corporate sectors in Germany. In doing so, we perform a counterfactual...

According to Harberger’s 1962 and 1966 seminal papers, the corporate income tax distorts the allocation of capital between the corporate and the non-corporate sector and reduces therefore aggregate output. To quantify this efficiency loss we apply a dynamic, computable, general equilibrium...

This paper investigates the effects of implementing a dual income tax (DIT) in Germany. We follow the reform proposal of the German Council of Economic Advisors(2003) and analyze its implications on capital formation, investment and welfare using a dynamic computable general equilibrium model....