DeutschClear Cookie - decide language by browser settings
Baretti, Christian; Huber, Bernd; Lichtblau, Karl (2002): A Tax on Tax Revenue: The Incentive Effects of Equalizing Transfers: Evidence from Germany. In: International Tax and Public Finance, Vol. 9, No. 6: pp. 631-649

This is the latest version of this item.

Full text not available from 'Open Access LMU'.


Several recent studies suggest that equalizing transfers in a federal system may distort the tax policy decisions of states. We study this issue for the German federal fiscal system. In a simple theoretical model, we first identify a substitution effect and an income effect of equalizing transfers. Our main hypothesis is that both effects should tend to reduce tax revenue of German states. We perform various empirical tests which confirm this hypothesis.

Available Versions of this Item