The inheritance and gift tax in Germany: Reform potentials for tax revenue, efficiency and distribution
https://doi.org/10.3326/pse.44.3.5 | Published online: September 1, 2020 Figure 1
Inheritance tax as percentage of GDP in OECD countries, 2017 Note: OECD statistics total tax revenue include social security contributions and therefore differ from national statistics. The value for Greece refers to 2016. Source: OECD database, own illustration. Figure 2
Inheritance tax and total tax revenue in Germany, Index: 1991=100 (in %) Table 1
Inheritance tax rates (in %)
Table 2
Personal tax allowances (in thousand euro) and tax classes Source: German inheritance tax and gift tax law, own illustration. Table 3
Valuation of business assets
Note: Current market valuation compared to the rule of law before and after the reform in 2016 Source: KPMG (2019); own calculations. Figure 3
Gini coefficients for different wealth types in Germany, Austria, and France (2014) Note: A real interest rate of 3% per annum is used for capitalisation since the year of transfer receipt. For this purpose, all bequests are expressed in prices of 2010 using country specific consumer price indices. Source: ECB, 2nd wave; own calculations. Figure 4
Inheritance volume in Germany, Austria, and France Note: In billion euro and prices of 2010. 95% confidence intervals are calculated using multiple imputation estimates from five imputations. Source: ECB, 2nd wave; own calculations. Table 4
Results of the difference-in-difference estimator L4P3
Note: Germany vs. France, period length = 4 years each, 3 periods before treatment. Period 1: 1996-1999, period 2: 2000-2003, period 3: 2004-2007, period 4: 2008-2011. All inheritances are measured in prices of 2010. Treatment took place in Germany. Standard errors are calculated using multiple imputation estimates from five imputations. Source: ECB, 2nd wave; own calculations. Figure 5
Tax exemptions divided by inheritances and gifts (in %) Figure 6
Personal tax allowances divided by inheritances and gifts (in %) Figure 7
Average inheritance tax rate - Tax revenue divided by the final tax base (in %) Figure 8
Effective inheritance tax rate - Tax revenue divided by the total value before any deductions (in %) Table 5
Estimated revenue and labour supply effects of a flat tax reform
Note: Labour supply effects are evaluated at the median of the income distribution. Source: Federal Statistical Office (2019a); GSOEP data 2018 (v34); labour supply model from Stockhausen (2019); own calculations. Figure 9
Distributional and labour supply effects of a cut in income tax of 8.3 billion euro (2019, in percent of gross income (tax relief) and in percent of total hours worked (labour supply) Note: Deciles of the distribution of household’s equivalised gross income. Source: GSOEP data 2018 (v34); microsimulation model Beznoska (2016); labour supply model from Stockhausen (2019); own calculations. Table A1
Results of the difference-in-difference estimator L4P1
Note: Germany vs. France, period length = 4 years each, 1 period before treatment. Period 1: 2004-2007, period 2: 2008-2011. All inheritances are measured in prices of 2010. Treatment took place in Germany. Standard errors are calculated using multiple imputation estimates from five imputations. Source: ECB, 2nd wave; own calculations. Table A2
Results of the difference-in-difference estimator L4P2
Note: Germany vs. France, period length = 4 years each, 2 periods before treatment. Period 1: 2000-2003, period 2: 2004-2007, period 3: 2008-2011. All inheritances are measured in prices of 2010. Treatment took place in Germany. Standard errors are calculated using multiple imputation estimates from five imputations. Source: ECB, 2nd wave; own calculations. Table A3
Results of the difference-in-difference estimator with additional period dummies L4P3
Note: Germany vs. France, period length = 4 years each, 3 periods before treatment. Period 1: 1996-1999, period 2: 2000-2003, period 3: 2004-2007, period 4: 2008-2011. All inheritances are measured in prices of 2010. Treatment took place in Germany. Standard errors are calculated using multiple imputation estimates from five imputations. Source: ECB, 2nd wave; own calculations. Table A4
Results of the difference-in-difference estimator L3P4
Note: Germany vs. France, period length = 3 years each, 4 periods before treatment. Period 1: 1997-1999, period 2: 2000-2002, period 3: 2003-2005, period 4: 2006-2008, period 5: 2009-2011. All inheritances are measured in prices of 2010. Treatment took place in Germany. Standard errors are calculated using multiple imputation estimates from five imputations. Source: ECB, 2nd wave; own calculations. Table A5
Results of the difference-in-difference estimator using gifts only L4P3G
Note: Germany vs. France, period length = 4 years each, 3 periods before treatment. Period 1: 1996-1999, period 2: 2000-2003, period 3: 2004-2007, period 4: 2008-2011. All inheritances are measured in prices of 2010. Treatment took place in Germany. Standard errors are calculated using multiple imputation estimates from five imputations. Source: ECB, 2nd wave; own calculations. Table A6
Results of the difference-in-difference estimator using gifts only L4P2G
Note: Germany vs. France, period length = 4 years each, 2 periods before treatment. Period 1: 2000-2003, period 2: 2004-2007, period 3: 2008-2011. All inheritances are measured in prices of 2010. Treatment took place in Germany. Standard errors are calculated using multiple imputation estimates from five imputations. Source: ECB, 2nd wave; own calculations. Table A7
Results of the difference-in-difference estimator with additional period dummies using gifts only L4P3G
Note: Germany vs. France, period length = 4 years each, 3 periods before treatment. Period 1: 1996-1999, period 2: 2000-2003, period 3: 2004-2007, period 4: 2008-2011. All inheritances are measured in prices of 2010. Treatment took place in Germany. Standard errors are calculated using multiple imputation estimates from five imputations. Source: ECB, 2nd wave; own calculations. Table A8
Results of the difference-in-difference estimator with additional period dummies and age group dummies L4P3AG
Note: Germany vs. France, period length = 4 years each, 3 periods before treatment. Period 1: 1996-1999, period 2: 2000-2003, period 3: 2004-2007, period 4: 2008-2011. All inheritances are measured in prices of 2010. Treatment took place in Germany. Standard errors are calculated using multiple imputation estimates from five imputations. Source: ECB, 2nd wave; own calculations. Figure 1 Inheritance tax as percentage of GDP in OECD countries, 2017 DISPLAY Figure Figure 2 Inheritance tax and total tax revenue in Germany, Index: 1991=100 (in %) DISPLAY Figure Table 1 Inheritance tax rates (in %) DISPLAY Table Table 2 Personal tax allowances (in thousand euro) and tax classes DISPLAY Table Table 3 Valuation of business assets DISPLAY Table Figure 3 Gini coefficients for different wealth types in Germany, Austria, and France (2014) DISPLAY Figure Figure 4 Inheritance volume in Germany, Austria, and France DISPLAY Figure Table 4 Results of the difference-in-difference estimator L4P3 DISPLAY Table Figure 5 Tax exemptions divided by inheritances and gifts (in %) DISPLAY Figure Figure 6 Personal tax allowances divided by inheritances and gifts (in %) DISPLAY Figure Figure 7 Average inheritance tax rate - Tax revenue divided by the final tax base (in %) DISPLAY Figure Figure 8 Effective inheritance tax rate - Tax revenue divided by the total value before any deductions (in %) DISPLAY Figure Table 5 Estimated revenue and labour supply effects of a flat tax reform DISPLAY Table Figure 9 Distributional and labour supply effects of a cut in income tax of 8.3 billion euro (2019, in percent of gross income (tax relief) and in percent of total hours worked (labour supply) DISPLAY Figure Table A1 Results of the difference-in-difference estimator L4P1 DISPLAY Table Table A2 Results of the difference-in-difference estimator L4P2 DISPLAY Table Table A3 Results of the difference-in-difference estimator with additional period dummies L4P3 DISPLAY Table Table A4 Results of the difference-in-difference estimator L3P4 DISPLAY Table Table A5 Results of the difference-in-difference estimator using gifts only L4P3G DISPLAY Table Table A6 Results of the difference-in-difference estimator using gifts only L4P2G DISPLAY Table Table A7 Results of the difference-in-difference estimator with additional period dummies using gifts only L4P3G DISPLAY Table Table A8 Results of the difference-in-difference estimator with additional period dummies and age group dummies L4P3AG DISPLAY Table |
September, 2020 III/2020 |
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