Our figure of the month 08/2016: Less income taxes cause more inequality


Private households experience in average an increase in disposable income of about 19 Euro per month if their payments of income taxes is reduced by 3.1 %. However, the amount varies between only 1.90 Euro for unemployed and 39.70 Euro for self-employed (without farmers). The increases in disposable income are highest for working households reaching values above the average. Pensioners, non-working population and unemployed achieve only below average gains. One exception form blue-collar workers: their disposable income raises by only 16.40 Euro which is below average as well. The reason for this is the level of their income, that lies only 5.6 % above the average. Public servants obtain with more than 60 % extra of the average income the highest disposable income. Unemployed are 58 % below the average and receive the lowest disposable income. Due to the fact that the highest gains in income caused by the income tax reduction are with households above the average, inequality is increasing.


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