Merz: The Distribution of Income of Self-employed, Entrepreneurs and Professions
4 Income and Tax Revenues within the German Tax System:
Overall Results
Before going into the details of our specific data base, the Income Tax Statistic, we
sketch the size and importance of income and taxes from German tax statistics in
general. This allows to integrate the following results into the general income and tax
situation in Germany.
Figure 1 describes the revenue percentages of the overall five tax categories. For 1992
the income tax revenue is 39% of all the tax income out of value added tax (27%), tax
of communes (12%), corporation tax (5%) and other taxes (17%).
Figure 1: Revenue Due to Type of Tax, Germany 1992
Source: Statistical Yearbook 1998
Thus, in 1992 (and all the years ago) the income tax (Einkommensteuer) is the dominant
tax income source within the German tax system. The income tax is divided by the
wage tax (Lohnsteuer) and the assessed income tax (veranlagte Einkommensteuer) with
6,1% resp. 32,9% of total 700.034 Mio. DM tax revenue in 1992.
Being the dominant income source in Germany is only one of the reasons why we
further on rely on this statistic as our data base. In addition, and focussing in particular
on the situation of the self-employed, the income tax statistic - as we shall point out - is
the most informative and realistic microdatabase regarding the final individual income
situation. Beyond that, and important for the representativity of the results, as a tax
statistic this is not a sample statistic but a popuplation statistic including all respective
tax payers.