Working Paper

The Kiel Subsidy Report: Basics, Results, and Conclusions for 2000 to 2005 (original publication in German)

The subsidies in Germany are the subject of intensive economic policy discussions. This article informs about the extent of subsidies. Subsidies include, in addition to tax benefits, grants awarded by the Federal Government, the Länder, the municipalities, the European Union and the Federal Employment Agency. The delimitations of the tax benefits and the financial assistance are explained; the extent and structure of the subsidies in the period 2000-2005 are shown. After the stocktaking, barriers to reducing subsidies are discussed. It is also shown which changes have been decided on subsidies after the general election. Finally, it is shown that if subsidies would be reduced, it would not be necessary to increase the VAT standard rate.

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