Ökonomische und soziale Kosten von Steuersenkungen

From 1999 to 2005 the former Red-Green government in Germany enacted a series of ambitious tax cuts that were snpposed to boost the German Economy. The article argues that these tax cuts instead of boosting the economy involved major costs. The revenue losses induced substantial expenditures cuts which reduced citizens' utility from public goods and services and at the same time dampened economic activity thereby extending Germany's stagnation. Additionally, they increased income disparity. In spite of these disillusioning experiences it is likely that German tax and fiscal policies are going to repeat their errors in the future.