commission on fiscal imbalance 合集

In our opinion it is sensible to have a uniform

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Unformatted text preview: nd as far as the confederation does not exercise its right to legislate. In addition the confederation has legislative authority if and as far as an equalization of living conditions throughout Germany or the safeguarding of legal and economic unity require a federal ruling of national interest. It comes as no surprise that the confederation has exercised its rights extensively in administrative practice. However, a centralization of national fiscal policy leads to a reduction in the states’ fiscal responsibility: fiscal independence is reduced to freedom of spending; the other side of the coin in budgetary autonomy - the procuring of revenue - is in practice subject to federal regulation. The negative consequences of this division of responsibilities are obvious. Within the framework of its initiative for a modernized federal structure Bavaria therefore demands that in the future the states themselves shall have legislative authority over those taxes which only they are entitled to at any rate (inheritance tax, tax on donations, real property tax, motor vehicle tax). We believe - for example in the case of inheritance tax - that it is not justified to have an identical basis of assessment and the same amount payable in the states of Schleswig-Holstein and Bavaria. In our opinion it is sensible to have a uniform evaluation basis for taxes on earnings to which both the confederation and the states are entitled to (income tax and corporation income tax), because in a small, interlocking economic area varying tax laws create more red tape than competitive edge. But it should be up to the states to determine the tax rates, or at least they should have the possibility to determine the tax factor. 55 Commission on Fiscal Imbalance 3. DISTRIBUTION OF PUBLIC REVENUE AMONG THE CONFEDERATION AND THE STATES 3.1. General Regulations The regulations governing tax sovereignty concerning public revenue serve to ensure that the confederation and the federal states (including the municipalities) obtain an appropriate share of the total proceeds produced by the national economy so that they are in a position to do their job and bear the financial burden it creates. As mentioned earlier the distribution of public revenue among the confederation and the states is determined and safeguarded by the constitution so that this process cannot become subject to the free interplay of political forces, and to safeguard the objectives mentioned above. Concerning the distribution of public revenue Germany has opted for a mixed system: for certain taxes sovereignty is exercised only by either the confederation, the states, or the municipalities (in this case we have a system of separation); other revenue is distributed among the confederation and the states (and in part the municipalities), in this case the system is based on consolidation (commonly shared taxes). Table 1 shows an overview. The federal taxes make up a portion of roughly 17% of the total tax revenue, the taxes for the states only amount to about 5%, the municipalities get approximately 7%, and about 71% of the total tax revenue comes from...
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