CGE models and capital income tax reforms. The case of a dual income tax for Germany. (Q2382006)

The book proposes an approach for the measurement of the effects of tax reforms mainly in the field of capital income taxation. The approach is based on the principles of dynamic computable general equilibrium (CGE) models. To investigate the effectiveness of the approach, a tax reform that has been suggested by the German Council of Economic Advisors (GCEA) has been studied. More specifically, the effects of introducing a Dual Income Tax (DIT) in Germany has been evaluated and quantified, using a model developed and calibrated to the German economy. The book is structured in 6 chapters. Chapter 1 presents an introduction to the subject matter, while chapter 2 discusses issues that relate to the German Tax System. Chapter 3 presents and discusses the main features of the DIT, and the problems related to its implementation. Chapter 4 presents the proposed approach for the measurement of the effects of tax reforms, while chapter 5 presents the investigations and results of the application of the approach to the study of DIT implementation to Germany. Finally chapter 5 summarises the conclusion of the study. The book is intended to an audience involved in financial and taxation issues that is at the same time quite familiar to the concepts of equilibrium models.