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Original scientific paper
https://doi.org/10.3326/pse.41.1.8

Demographic change and income tax revenue in Germany: a microsimulation approach

Martin Beznoska   ORCID icon orcid.org/0000-0002-9966-221X ; Public Finance Research Unit, Cologne Institute for Economic Research (IW), Köln, Germany
Tobias Hentze ; Public Finance Research Unit, Cologne Institute for Economic Research (IW), Köln, Germany

Fulltext: english, pdf (421 KB) pages 71-84 downloads: 341* cite
APA 6th Edition
Beznoska, M. & Hentze, T. (2017). Demographic change and income tax revenue in Germany: a microsimulation approach. Public Sector Economics, 41 (1), 71-84. https://doi.org/10.3326/pse.41.1.8
MLA 8th Edition
Beznoska, Martin and Tobias Hentze. "Demographic change and income tax revenue in Germany: a microsimulation approach." Public Sector Economics, vol. 41, no. 1, 2017, pp. 71-84. https://doi.org/10.3326/pse.41.1.8. Accessed 22 Feb. 2020.
Chicago 17th Edition
Beznoska, Martin and Tobias Hentze. "Demographic change and income tax revenue in Germany: a microsimulation approach." Public Sector Economics 41, no. 1 (2017): 71-84. https://doi.org/10.3326/pse.41.1.8
Harvard
Beznoska, M., and Hentze, T. (2017). 'Demographic change and income tax revenue in Germany: a microsimulation approach', Public Sector Economics, 41(1), pp. 71-84. https://doi.org/10.3326/pse.41.1.8
Vancouver
Beznoska M, Hentze T. Demographic change and income tax revenue in Germany: a microsimulation approach. Public Sector Economics [Internet]. 2017 [cited 2020 February 22];41(1):71-84. https://doi.org/10.3326/pse.41.1.8
IEEE
M. Beznoska and T. Hentze, "Demographic change and income tax revenue in Germany: a microsimulation approach", Public Sector Economics, vol.41, no. 1, pp. 71-84, 2017. [Online]. https://doi.org/10.3326/pse.41.1.8

Abstracts
As a result of high net migration, both Germany’s overall population and its workforce potential are currently growing. However, within a few years this demographic trend will be reversed, leading to a decline in population as a whole and especially in the number of those gainfully employed. In this paper, we use a population projection to apply a static ageing approach to German micro data. Then, we simulate income tax revenue with a microsimulation model for the future population. In 20 years’ time the annual price-adjusted income tax loss is estimated to be equal to € 18 billion or almost 7 per cent. This fall in income tax revenue resulting from a shrinking and ageing society will place a huge strain on public finances in Germany, an effect further enhanced by the shift of the tax burden from pension contributions to pension benefits.

Keywords
public finance; tax revenue; demographic change; microsimulation

Hrčak ID: 178760

URI
https://hrcak.srce.hr/178760

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