75
the slightly lower than expected increase of VAT could partly be explained by an
increase of the relative size of the shadow economy. 128
2.4 Main excises: mineral oil and tobacco taxes
There are a number of excises, but two of them – the mineral oil tax and the tobacco
tax – are the most important in revenue terms. In both taxes a federally unified legislation applies.
2.4.1 Current regulation (2007)
The mineral oil tax is levied on motor fuel, furnace fuel and natural gas. The tax
rates are calculated based on volume sold. Since January 1st, 2003 the rate has
equaled €0.6698/l for unleaded fuel, €0,721/l for leaded fuel, and €0.4857/kg for
diesel. Heating oil and natural gas for heating purposes are taxed at far lower rates
with €0.06135/l for light heating oil, €0.025/kg for heavy heating oil, and
€0.550/kwh for natural gas.
The tax on tobacco consists of a price-related and a volume-related element with
rates depending on the specific product (cigarettes, cigars or tobacco). The current
rate for cigarettes is €0.0827 per piece (since September 1st, 2005) and 25.29% of
the final sale price, while the rate for cigars and tobacco is lower.129
2.4.2 Mineral oil and tobacco taxes – rates, reforms and revenue development
Mineral oil taxes were introduced in 1930. In 1939 diesel was included and since
1960 heating oil as well. Throughout the period analyzed in our data-set tax rates
increased (see Figure 34), and the frequency of increases accelerated after reunification in 1990.
128 Schneider (2005) estimates, that the shadow economy in Germany increased from 5.75% of
GDP in 1975 to 16.64% of GDP in 2005.
129 The current rate is €0.013 per cigar plus 1% of the final price and for tobacco €19.15 per kg
plus 17.02% of the final sale price.
76
TAX REFORMS MINERAL OIL AND TOBACCO TAX
1950/2007
0
10
20
30
40
50
60
70
80
19
50
19
52
19
54
19
56
19
58
19
60
19
62
19
64
19
66
19
68
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
LEADED FUEL
UNLEADED FUEL
DIESEL
19
50
19
52
19
54
19
56
19
58
19
60
19
62
19
64
19
66
19
68
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
De
ce
mb
er
1s
t, 0
0
No
ve
mb
er
1s
t, 0
1
Ja
nu
ary
1s
t, 0
2
Ja
nu
ary
1s
t, 0
3
Ma
rch
1s
t,
De
ce
mb
er
1s
t, 0
4
Se
pt
em
be
r 1
st,
05
Ju
ne
8t
h,
53
Ma
rch
1s
t, 6
7
(in
cr
1e
as
e)
Ju
ly
1s
t, 7
2
Ja
nu
ary
1s
t, 7
7
Ja
nu
ary
1s
t, 8
0
Ju
ne
1s
t, 8
2
Ma
y 1
st
, 8
9
Ma
rch
1s
t, 9
2
EURO
CENT/L
TOBBACCO TAX INCREASES
MINERAL OIL TAX RATES
Data source: Tax laws/Association of the German Mineral Oil Industry.Reforms by date of implementation.
Figure 34: Tax reforms in mineral oil and tobacco taxes
Tax rates of tobacco taxes were increased in 1967 and 13 times thereafter with a
concentration of increases after 2000.
Our data-set shows that mineral oil and tobacco tax reforms were strictly dominated by tax increases (see Figure 35). In mineral oil taxes, the most important increases took place in 1991/1992. Generally increases in between 1989 and 1999
were especially strong. With respect to tobacco taxes, the most important increase
took place in 1972. Compared to the extent of reforms in the 80s, the fiscal effects of
tax increases played no major role in between 1983 and 2000.
77
MINERAL OIL TOBACCO TAX REFORMS
-0,05%
0,00%
0,05%
0,10%
0,15%
0,20%
0,25%
65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3
INCR
RED
-0,10%
0,00%
0,10%
0,20%
0,30%
0,40%
0,50%
0,60%
65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3
INCR
RED
MINERAL OIL TAX
TOBACCO TAX
Rate increase
1967
Rate increase
July 1st 1972
Rate increase
March 1st 1967 Rate increase January 1st 1977
Rate increase
June 1st 1982
Rate increase
May 1st 1989
Rate increase
March 1st 1992
Rate increase
January 1st 2002
Rate increase
December 1st 2004
Rate increase
1973
Rate increase
1981
Rate increase
1989
Rate increase
1991/92
Rate increase
1994
Rate increase
1998/99/00
Fiscal Effects/
GDP
Fiscal Effects/
GDP
Own calculations based on: Federal Ministry of Finance (2004)/Tax laws.Reforms by date of implementation.
Figure 35: Fiscal effects of tax reforms in mineral oil and tobacco taxes
Cumulated effects of mineral oil and tobacco tax reforms (see the lower part of
Figure 36) showed an upward trend throughout the period analyzed which accelerated after 1990. Mineral oil tax reforms were in absolute extent far more important
than tobacco tax reforms.
Together tobacco and mineral oil taxes accounted for 12% of all tax revenues in
1950 as well as in 2004. However, the developments of the two excises diverged
strongly.
Despite the upward trend in cumulated reforms (and in the tax burden) the importance of tobacco taxes, which alone accounted for 12% of tax revenues in 1950,
strongly decreased within the period analyzed. Volume and price effects unrelated to
taxation were responsible for this development. Nonetheless, some tax increases –
like especially the 1967 tax increase – were directly reflected in revenues, while
most others were less visible in revenue developments.
78
MINERAL OIL AND TOBACCO TAXES - GERMANY 1950-2004
Revenues/Total
Tax Revenues
0%
2%
4%
6%
8%
10%
12%
14%
16%
19
52
19
55
19
58
19
61
19
64
19
67
19
70
19
73
19
76
19
79
19
82
19
85
19
88
19
91
19
94
19
97
20
00
20
03
REVENUES FROM MAIN EXCISES
MINERAL OIL TAX REVENUES
TOBACCO TAX REVENUES
0%
5%
10%
15%
65 68 71 74 77 80 83 86 89 92 95 98 1 4
Cumulated fiscal
effects of tax
reforms/Total tax
revenues
Mineral oil
Tax
Tobacco
tax
Own calculations based on: Federal Ministry of Finance (2004)/Federal Statistical Office(2007).Reforms by date of implementation.
Figure 36: Linking cumulated reform effects and revenue development in main
excises
The share of mineral oil tax revenues over all tax revenues increased strongly till the
late 1960s, decreased then till reunification in 1990 and increased strongly thereafter. Additional data on the volume of mineral oil consumption indicate that the
strong increase in revenues from mineral oil tax revenues until the early 1970s was
mainly due to increases in volume sold. Until the early 1990s the reduction in revenues relatively to GDP resulted from a slight downward trend in mineral oil consumption, while the increases after 1990 resulted mainly from strongly increasing
tax rates (partly to finance German reunification).130
130 Data from the federal statistical office shows that the volume of mineral oil consumption
increased in Western Germany until the early seventies and reached its peak in 1974. Afterwards, the volume of consumption went down till the early eighties and was then relatively
stable until recently.
79
2.5 Property taxes
Property taxes in Germany consist of the real estate, the real estate acquisition, and
the inheritance tax. They accounted for only 4% of total tax revenues in 2006 and
showed only a very limited reform activity. Therefore, we review the regulation and
reforms of these taxes only very shortly.
2.5.1 Property taxes: current regulation (2007)
2.5.1.1 The local real estate tax – current regulation
In revenue terms, the real estate tax is the most important tax on property in Germany. Real estate tax is levied for each calendar year on real estate used for farming
and forestry in form of the real estate tax A and for all other real estate in form of
real estate tax B.131 The tax base is the value of real estate which is assessed on a
special date by so called “standard” or “ratable” values (“Einheitswert”). As the
standard values for land and buildings date back to 1964 (in case of the Eastern
German states even to 1935) and have not been updated in recent years, buildings
and land are widely believed to be considerably undervalued.132 A federal tax law
sets basic tax rates on which the local authorities can apply their own multipliers.133
2.5.1.2 The real estate transfer tax – current regulation
The acquisition of real property in Germany is subject to real estate transfer tax
which is imposed on the agreed consideration (usually the purchase price) at a rate
of 3.5%. In revenue terms the real estate acquisition tax is the second most important
property tax in Germany.
131 Based on the real estate tax law from August 7th, 1973. See BGBl I (1973), pp. 965 ff. and
subsequent changes.
132 The standard values are estimated to equal regularly about 20% to 50% of the market value of
real estate.
133 Basic tax rates for farming and forestry (real estate tax A) are 6.0‰. Basic rates of the real
estate tax B vary by kind of property and equal in between 2.6 ‰ and 3.5‰ in Western Germany and in between 5‰ and 10‰ in Eastern Germany (based on the lower standard values).
In 2002 the weighted average of municipal multipliers for the real estate tax A equaled 289%
in the Western German states (255% in the Eastern German states) and 370% for the real estate tax B (288% in Eastern Germany). For land without any buildings (which is not used for
farming and forestry) this led in 2002 in Western Germany to a nominal average tax rate of
1.295%. However the effective tax rate is often lower as the real estate tax is deductible as a
business expense from taxable business income.
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References
Zusammenfassung
Was bestimmt die Steuerpolitik? Welche Ziele verfolgen die Bundesregierungen bei Steuerreformen? Haben Steuererhöhungen und Steuersenkungen einen Einfluss auf die Wahlergebnisse? Auf der Basis eines neuen Datensatzes zu den fiskalischen Effekten von Steuerreformen im Zeitraum von 1964 bis 2004 zeigt das Werk Muster der Steuerpolitik auf und testet zentrale ökonomische Hypothesen. Dabei zeigt sich, dass normative ökonomische Ansätze kaum einen Erklärungsbeitrag für die zu beobachtende Steuerpolitik leisten können.
Ausgehend von wichtigen polit-ökonomischen Theorien zeigt der Autor, dass die Mehrheitskonstellationen im Bundesrat einen wichtigen Einfluss auf die Steuerpolitik haben, allerdings genau umgekehrt wie von der Blockade-Hypothese behauptet: Steuerreformen sind gemessen an ihren Fiskaleffekten bei gegenläufigen Mehrheiten in Bundestag und Bundesrat häufiger und umfangreicher. Des Weiteren gibt es keine Hinweise darauf, dass die parteipolitische Zusammensetzung der Bundesregierung einen wichtigen Einfluss auf Steuerreformen hat. Wahltaktische Terminierungen von Steuerreformen spielen aber sehr wohl eine wichtige Rolle. Eine Auswertung des Zusammenhangs von Steuerreformen und Wahlergebnissen zeigt allerdings, dass die Versuche der Bundesregierungen, ihre Wiederwahlwahrscheinlichkeit durch Steuersenkungen kurz vor der Wahl zu erhöhen, wenig erfolgreich sind: Nicht nur die Jahre unmittelbar vor den Wahlterminen, sondern die Steuerpolitik in der gesamten Legislaturperiode hat einen Einfluss auf die Bundestagswahlergebnisse der regierenden Parteien.