Dirk Kiesewetter

Net Wage Illusion in a Real-Effort Experiment*

In a controlled laboratory experiment, subjects had to fold letters in order to earn money. While the net income per letter was the same in the three treatments, the gross income varied and the tax rate was 0, 25, and 50 percent. Although work incentives should be the same in all treatments, subjects worked harder and longer when they were taxed. We conclude that this is because of a net wage illusion effect. The existence of this effect demonstrates that not only are the tax rate and the tax base of importance for work incentives, but the perception of a tax is also important.

Ein Standardmodell für Investitionsentscheidungen in Kapitalgesellschaften

Wenn ein Steuersystem von fehlender Entscheidungsneutralität geprägt wird, ist es unumgänglich, Steuern in Entscheidungskalküle zu integrieren. Nur so ist sichergestellt, dass die für den Investor nach Steuern optimale Entscheidung getroffen wird. Der Kapitalwert nach Steuern gilt in der betriebswirtschaftlichen Steuerplanung seit langem als Standardmodell für Investitionsentscheidungen eines einkommensteuerpflichtigen Investors. Soll jedoch über eine Investition in einer eignerdominierten Kapitalgesellschaft entschieden werden, so ist das Standardmodell insofern zu überdenken, als Steuerwirkungen nun auf zwei Ebenen auftreten: in der selbstständig steuerpflichtigen Kapitalgesellschaft und bei deren einkommensteuerpflichtigen Eignern.

It's All About Tax Rates: An Empirical Study of Tax Perception

In this paper we apply conjoint analysis to study the influence of changes in the tax rate and the tax base on the perceived tax burden. Our results show that the majority of individuals do not make rational tax decisions based on the actual tax burden, but rather use simple decision heuristics. This leads to the importance of the tax rate being significantly overestimated and the importance of the tax base being significantly underestimated. Furthermore we determine framing effects and show that under specific assumptions, a rise in the actual tax burden can lead to a electoral success.

Tax Perception - An Empirical Survey

This paper gives a survey of the experimental literature on the perception (bias) of individuals with respect to their own tax burden and its effect on economic decisions. Six strands of literature are discussed: (1) perception of marginal tax rates, (2) influence of tax complexity on tax perception, (3) taxation and incentives to work, (4) tax salience, (5) tax morale and fairness and (6) money illusion, perceived inflation and fiscal drag. The literature discussed contains more evidence for than against a perception bias.

The Influence of Tax Labeling and Tax Earmarking on the Willingness to Contribute – A Conjoint Analysis

We apply conjoint analysis to study the influence of tax labeling and tax earmarking on German taxpayers’ willingness to contribute. We show that labeling and earmarking effects can substantially increase participants’ willingness to contribute, and we analyze how these effects interact. These results add to the explanation of the variety in tax labels and provide implications for tax policy on further reforms of the tax and contribution system. Labeling and earmarking contributions are important instruments in selling policies and increasing tax revenue.

The Biased Effect of Aggregated and Disaggregated Income Taxation on Investment Decisions

In a laboratory experiment that allows us to vary the taxation method while keeping the financial outcomes constant, we find clear evidence that aggregated income taxation (comparable to profit taxation) with complete loss deduction induces a sustained bias towards more risky investment decisions, while disaggregated income taxation (comparable to a transaction taxation with loss offset) does not. We suggest that this bias may be exploited to increase the volume of private investments by choosing aggregated income taxation if investors are (too) risk-averse, and to decrease the volume and the risk by choosing disaggregated income taxation if investors are (too) risk-seeking.

Die versehentliche Einführung einer konsumorientierten Einkommensteuer in Österreich und Lehren für die Abgeltungssteuer in Deutschland

Wie andere europaische Staaten auch hat Osterreich uber Jahrzehnte hinweg beansprucht, Zinsertrage aus privaten Finanzanlagen in der Einkommensteuer zu erfassen, ohne diesen Besteuerungsanspruch durchsetzen zu konnen. Im Gegensatz zu seinen europaischen Nachbarn hat Osterreich hieraus bereits Anfang der 90er Jahre Konsequenzen gezogen. Im Jahr 1993 wurde eine Quellensteuer auf Zinsertrage eingefuhrt, mit deren Abfuhrung die Einkommensteuer, die Vermogensteuer und die Schenkungsteuer abgegolten sind. Anders als die gescheiterten Quellensteuerexperimente Ende der 80er Jahre in Deutschland hat die Abgeltungssteuer nicht zu einer Kapitalflucht ins Ausland gefuhrt1.

Who has really paid for the Reconstruction of East Germany? Expected and Realized Returns on Real Estate Investments in East and West Germany in the 1990s

We evaluate the profitability of investments in residential property in Germany after unification with a focus on the comparison of East and West Germany. Calculations are carried out for (1) the after-tax return an investor might have expected at the beginning of the 1990s, and (2) the after-tax return that has been realized ten years after. We compare a set of statistical data for investments in fifty major cities by using complete financial budgeting. The results show that tax subsidies could not always protect investors from losing money, but they have boosted realized returns after tax considerably. Therefore, it was indeed the taxpayers, not the investors, who have borne the cost of reconstructing East Germany.

Der Einfluss von Steuern und Subventionen auf die Rendite fremd‐ und selbst genutzter Wohnimmobilien in Deutschland

Abstract The profitability of real estate investments in Germany has been highly influenced by taxation and subsidies. We calculate realized returns on investment and subsidy quotas to resident individuals from an investment in average apartments in 50 major cities, rented out and self-occupied. The investment periods (1991-2001, 1996- 2006, and 2004-2014) picture major changes in the taxation of rental income and in home buyer subsidies. Unsystematic tax shelters have favored the purchase of apartments to rent out by high income individuals. Home buyer subsidies have only partly brought similar returns to average earners. Dodgy clientele effects persist until today.

The Name Game for Contributions – Influence of Labeling and Earmarking on the Perceived Tax Burden

In this paper we apply conjoint analysis as an empirical method to study the influence of tax labeling and tax earmarking on the perceived tax burden. As reference for the individual behavior we use the model of a rational utility maximizer described by the economic theory. We determine a significant influence of the labeling and the earmarking of taxes. We can show that the labeling and earmarking effect can decrease the perceived tax burden for the test persons which results in a deviation from a (rational) consumption maximizing behavior. These results give important implications for tax policy regarding further reforms of the tax and contribution system.