Cite JOURNAL ARTICLE
Jenseits von Ausgabenkürzungen
Alternative Optionen zur Haushaltssanierung von Bundesländern: der Fall Berlin
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 127 (2007), Iss. 2 : pp. 259–295
Germany's public budgets are in distress. For several years, the „golden rule" has been broken and the deficit criterion of Maastricht has not been met. As German states have hardly any tax setting autonomy and as their revenue is mainly determined by a fiscal equalisation system, the discussion of how to solve these budgetary problems heavily concentrates on expenditure cuts. This paper analyses additional possibilities for German states to overcome fiscal imbalances. Notwithstanding the fiscal equalisation system, revenue increases occur with higher economic growth, higher tax rates, the levy of new duties and privatisation. Furthermore, public expenditures decline with economic growth and increasing wealth as fewer transfers are needed and subsidies to public services can be reduced. These aspects are discussed, simulated and calculated for the state of Berlin.