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Germany: Selected Issues
Author:
International Monetary Fund. European Dept.
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2024: Issue 230
Language:
English
Publication Date:
18 Jul 2024
DOI:
https://doi.org/10.5089/9798400283406.002
ISBN:
9798400283406
ISSN:
1934-7685
Pages:
31
Keywords:
D. solvency stress analysis; B. real estate development; CRE exposure; property tax tax revenue; spending pressure; CRE loan; Loans; Consumption taxes; Pension spending; Global
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This Selected Issues paper explores options for Germany to generate additional fiscal room by reducing its public spending and increasing its revenues, while minimizing the associated costs to the economy. The resulting menu of policy options is guided by examining areas where Germany stands out in simple comparisons against other advanced economies. Germany could increase its collection of taxes on real estate. Germany could also generate revenue by closing unnecessary and distortionary loopholes in the treatment of property within income and corporate taxes. These measures and a moderate easing of the debt-brake’s limits could help generate substantial fiscal room for higher public investment and other priority spending needs, as well as for growth-enhancing tax reforms. The appropriate choices among these measures and other options will depend on public preferences across various dimensions, including distributive preferences and views about the appropriate size and role of the state. This paper presents more options than are necessary, meaning that not all of the options need to be adopted. Choices between the various options will depend on social preferences, for example on the size of the government.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund