51 NEW TAX REGULATIONS (WITH FISCAL EFFECTS) BY SIZE 0 100 200 300 400 500 -0.015 -0.010 -0.005 0.000 0.005 0.010 Series: REFORMSFE Sample 1 1047 Observations 913 Mean -5.58e-05 Median -6.05e-06 Maximum 0.009039 Minimum -0.015219 Std. Dev. 0.001232 Skewness -3.122859 Kurtosis 52.33076 Jarque-Bera 94059.28 Probability 0.000000 Own calculations based on: Federal Ministry of Finance (2004). Fiscal effects of new regulations/ GDP # Figure 19: Tax reforms by size (Histogram) 1.3 Timing of reforms Our data-set allows us to analyze the timing of the adoption of tax reforms (reflecting tax policy activity) as well as the implementation of tax reforms (reflecting effective changes in the tax burden). We find that the legislative implemented the lowest number of regulations in January, April and May (upper part of Figure 20). High activity can be observed in March (9.1% of all new regulations) and June (11.6% of all regulations). However, the lion’s share of regulations was passed in December (41.5% off all regulations).73 73 This finding is supported by an alternative analysis of data from the “Bundessteuerblatt” (see Blasch et al. (2006)). 52 0 50 100 150 200 250 300 350 400 450 500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The legislative process: Adoption of new regulations TIMING OF TAX REFORMS 1965-2004 0 100 200 300 400 500 600 700 800 900 1000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Changes of the tax burden: Implementation of new regulations Number of regulations Number of regulations Own calculations based on: Federal Ministry of Finance (2004)/tax laws. Figure 20: Timing of new regulations A vast majority of new regulations is coming into effect at the beginning of the year. Our data show that 84.9% of all new regulations come into force in January. The only other month with a substantial number of regulations coming into effect is July (5.8% of all regulations) - the beginning of the second half of the year. 1.4 Increases, reductions and reform intensity in the main taxes So far we have analyzed the overall pattern of reform. But which taxes are most important for tax reforms? Here we analyze the distribution of reductions and increases by kind of tax. If we split up cumulated tax burden reductions by kind of tax, we find that wage and income taxes dominated the fiscal effects of tax reductions (with a share of 84%) while corporate profit taxes accounted for only 5%, VAT for 4%, local trade taxes for 3%, and net wealth taxes for 2% of all fiscal effects of tax reforms (see Figure 21).