Plädoyer zur gesetzlichen Regelung des Streikrechts – eine Replik

In the recent past, Germany has experienced increasing strike activity by small trade unions. This became possible through a change in high-level legislation allowing competition between trade unions at the firm level. The German government has responded by implementing a new law, which restricts this competition, but many observers regard it as inappropriate. In a recent issue of this journal, the Scientific Advisory Board to the Federal Ministry of Transport and Digital Infrastructure proposes specific legal measures to be taken. The present paper comments on these proposals. It supports the claim for legal regulation of strike activities, but it deviates with regard to the scope of application. The point is made that striking is an activity that inherently requires legal regulation, and that legal regulation is only dispensable in sectors governed by strong competition.     

The contribution of equalization transfers to fiscal adjustment: Empirical results for German municipalities and a US–German comparison

This paper considers the role of fiscal equalization in maintaining fiscal balance. It employs a large panel of German municipalities in order to investigate the dynamic fiscal policy adjustment using a vector-error–correction model that explicitly takes account of the intertemporal budget constraint. The results confirm that a substantial part of fiscal adjustment to revenue shocks takes place by offsetting changes in intergovernmental transfers: in present-value terms about 34 cents of a permanent 1 € decrease in own revenues are compensated by subsequent changes in fiscal-equalization transfers. Hence, the contribution of intergovernmental transfers in maintaining fiscal balance is found to be two to three times larger than in the case of US municipalities investigated by Buettner and Wildasin [Buettner, T., Wildasin, D.E., 2006. The dynamics of municipal fiscal adjustment. Journal of Public Economics 90, 1115–1132]. Despite fiscal equalization, however, expenditures are not found to display smaller fluctuations in the German case.     

Recent Developments at DG Competition: 2017/2018

The Directorate General for Competition at the European Commission enforces competition law in the areas of antitrust, merger control, and state aids. This year’s article provides first a general presentation of the role of the Chief Competition Economist’s team and surveys some of the main achievements of the Directorate General for Competition over 2017/2018. The article then reviews: the Google Search (Shopping) case, the role of price discrimination in state aid cases; and the use of counterfactuals in merger cases where alternative transactions might have occurred absent the merger.     

The impact of nonprofit taxes on foreign direct investment: evidence from German multinationals

This paper provides an empirical analysis of the impact of taxes other than profit taxes on both investment and location decisions of multinationals. Besides effects of corporate income taxes, the results confirm significant adverse effects of nonprofit taxes such as property taxes, sales taxes and VAT, and import duties on the level of FDI. However, once country-specific fixed effects are included, most of the effects of nonprofit taxes vanish. This is supported by the analysis of location decisions, where taxes other than corporate income taxes are not found to exert any adverse effects on the location probability in a setting with country-specific fixed effects.      

Tax incentives and the location of FDI: Evidence from a panel of German multinationals

Using a firm-level panel data set this paper investigates the impact of taxation on the decision of German multinationals to hold or establish a subsidiary in other European countries or abroad. Taking account of unobserved local characteristics as well as firm-specific preferences for potential locations, the results confirm significant effects of tax incentives, market size, and of labor cost on cross-border location decisions. In accordance with Devereux and Griffith (1998) we find that the marginal effective tax rate has no predictive power for location decisions. However, the results indicate a considerably weaker predictive power of the effective average tax rate as compared to the statutory tax rate. JEL Code:H25 ⋅ F23 ⋅ F21 ⋅ R38     

Steuerflucht und Steueroasen

The current debate on tax planning has to distinguish between tax evasion and aggressive tax planning. While tax evasion is illegal and requires the enhanced exchange of information, measures against aggressive tax planning seem to be very complex and complicated. Tax havens’ benefits from tax haven activities are inversely related to the intensity of competition among tax havens. Once the set of tax havens narrows, each havens’ share of the business increases and its margins go up. This competition aspect makes initial successes easy but final success very difficult. Nevertheless, some authors argue that action against tax flight is inevitable. As tax flight is a multilateral phenomenon, coordinated initiatives by country groups appear particularly promising. Here the EU should be in the vanguard. Only automatic information exchange generates the transparency and leeway needed to eliminate income tax evasion and to permit countries to devise tax codes at their own discretion. Despite the European trend towards lower corporate taxes, an empirical analysis shows that German multinationals have increased their tax haven activities. Recent research suggests that this development might be explained by the increased usage of anti-tax avoidance measures by high-tax countries. The substitutive nature of different tax-avoidance schemes indicates that only a coordinated closing of loopholes for profit shifting would reduce the demand for tax-haven operations significantly.