Page 324 - Invited Paper Session (IPS) - Volume 2

IPS264 Oliver H. et al.
By comparing the absolute effects of each tax for 2001 and 2011, it can be
seen that the reduced overall effect is primarily due to the reduced tax burden
of the communal income tax and, to some extent, also to the cantonal income
tax, while the effect of federal taxes was stable. Therefore, the proportional
significance of federal taxes increased. For communal taxes, progression as
well as the mean tax rate decreased. The results suggest that redistributive
effects declined on the level where tax competition was most pronounced.
While federal tax is exposed to international tax competition, federal units in
addition compete with other cantons or even with other communities within
their canton.
The figure further indicates the significance and mechanism of the different
taxes. Although the federal tax makes up only 1/8 of the total tax burden, it
accounts for more than one third of the total redistributive effect. According
to the progressivity index, federal tax is the most progressive tax. How do
deductions relate to redistributive effects?

Figure 2 provides visual access to the different redistributive effects.

Figure 2: Partial redistributive effects of deductions

The figure starts with a hypothetical value of a post-tax Gini coefficient if
deductions are ignored. The deductions are then broken down into six main
categories and introduced one after another so that the magnitude of the

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