Tax Reform and Debt Sustainability in Germany: An Assessment Using the Global Fiscal Model
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
In 2005, the German government announced a far-reaching fiscal adjustment program. This paper uses the IMF’s Global Fiscal Model to study its impact and explores options for addressing long-term pressures from population aging. The growth effects of the planned VAT increase are likely modest, largely owing to the stimulating effect of other tax reductions. The reform will improve the long-term debt path but achieving fiscal sustainability requires further adjustment over the medium term. An additional package of expenditure restraint, entitlement reform, and tax-base broadening compares favorably to other adjustment options. Spillover effects to trading partners of these policies are modest.
Series:
Working Paper No. 2007/046
Subject:
Corporate income tax Expenditure Fiscal policy Personal income tax Public debt
English
Publication Date:
February 1, 2007
ISBN/ISSN:
9781451866100/1018-5941
Stock No:
WPIEA2007046
Pages:
30
Please address any questions about this title to publications@imf.org