Value added tax
The municipal value added tax has long been proposed as a replacement for trade tax . It records the income generated by local production. Uniform taxation of local value added requires the involvement of the liberal professions and state institutions. If the property tax is abolished , the agricultural and housing sectors could also be involved. As a property tax, the value added tax has a proportional tax rate that can be relatively low (2.5 - 3%) due to the broad assessment basis. In order to guarantee and deepen the municipal financial autonomy, the municipalities should be granted a right of assessment.
The value-added tax has a number of properties that make it a municipal tax. It shares the municipalities equally in the local economic power, which is expressed in the added value. In accordance with the principle of equivalence and the balance of interests, this is how companies finance municipal services from which they benefit as a group. Since the group of taxpayers and the assessment base are expanded, the value added tax leads to a more even distribution of the revenue compared to the trade tax. The stability of the tax revenue in the course of the business cycle is also improved. In macroeconomic terms, the added value corresponds to the national product , so that the income of the municipalities no longer fluctuates more than economic activity.
Another advantage of the value added tax is its high level of competitive neutrality. There are hardly any distortions of competition at the national level as long as all companies are used equally to finance municipal services. In addition, the value added tax is neutral with regard to the use of production factors. However, as with trade tax, exports cannot be exempted, so that German suppliers continue to appear to be disadvantaged in international competition. On the other hand, overall economic efficiency also requires companies to be burdened with attributable infrastructure costs. In this respect, there is a conflict between competition policy goals and the principles of fiscal equivalence and the balance of interests. The exemption of the added value contained in exports serves less to neutralize taxation than to covert export promotion. In addition, any tax relief for the export industry with constant tax revenue must be bought at the expense of a higher direct or indirect burden on the other companies.
Related to the concept of the value added tax is the value added tax, which also uses the added value as a tax base, but is proposed to finance social security.
See also
literature
- Scientific Advisory Board at the Federal Ministry of Finance, expert opinion on the reform of municipal taxes in the Federal Republic of Germany, series of publications by the Federal Ministry of Finance, Volume 31, Bonn 1982.
Web links
- Wolfgang Scherf, replacement of trade tax with a creditable value added tax, in: Wirtschaftsdienst, Heft 10, 2002, S. 603 ff.Download (PDF; 141 kB)