G. Stornaiuolo

Germany Tax Equalization System and its Effects on Gap Reduction

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Abstract

It is under debate if the organization of the German Federal State, with its features and its peculiarities, has been adequate or not to reduce or possibly to equalize territorial differences. This research paper proves that the reduction of economic differences in Germany has been strictly dependent on some principles present in the Fundamental Law. These principles, up to now, have influenced and bonded some variables, such as the degree of approval that the community as a whole reserved to solidarity, the repartition of duties among the different levels of Country's government, the fiscal system influencing financial relationships, the tools and the mechanisms used to reach such results. The concepts of interpersonal equity and solidarity among territories discussed in this research paper provide useful information applicable to the Italian scenario, often referring to the German experience as benchmark.

Keywords

  • Fiscal federalism
  • Transfers
  • Gaps and Growth
  • Germany

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