Tax Policy Options for a United Germany

108 Pages Posted: 15 Feb 2006

See all articles by Bernd Genser

Bernd Genser

University of Konstanz - Faculty of Economics and Statistics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: October 1990

Abstract

A central requirement in the rapid movement of German Democratic Republic (GDR) toward a market economy is the introduction of a market-oriented tax system. The paper highlights the main features of the traditional socialist tax structure of the GDR and the current tax structure of the Federal Republic of Germany (FRG). Arguments for an adequate short-term tax reform in the GDR are developed in two scenarios, contrasting the approach of taking over the FRG tax system (adoption scenario) and an autonomous tax reform in the GDR (reform scenario). Both scenarios recommend a flexible adjustment approach which anticipates the medium-term development of the German tax system pursuant to domestic reform requirements, international tax harmonization and fiscal federalism.

JEL Classification: 323

Suggested Citation

Genser, Bernd, Tax Policy Options for a United Germany (October 1990). IMF Working Paper No. 90/89, Available at SSRN: https://ssrn.com/abstract=885043

Bernd Genser (Contact Author)

University of Konstanz - Faculty of Economics and Statistics ( email )

Universitaetsstr. 10
78457 Konstanz
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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