17.1 Overview of the historical development

In the graphic below you can compare all tax rates that have existed in Germany. You can select the corresponding years by placing a check mark.

If you compare the development in the course of the decades, three aspects are particularly striking:

1) The top tax rate drops considerably, by about 10%.
2) The income at which the top tax rate begins to apply remains almost constant over the years. While in 1958 the highest progression level started at 18 times the average monthly gross income, this level dropped to 1.2 times in 2016.
3) The basic tax-free allowance usually grows only very moderately. Only in 1996 the rate almost tripled.

In summary, it can be seen very clearly that both the lower income segments (3) and the upper ones (1) are being relieved, while the middle incomes are drawn on more (2).

Select the years:

1958 1965 1975 1978 1979 1981 1986 1988 1990 1996 1998 1999
2000 2001 2002 2004 2005 2007 2009 2010 2013 2014 2015 2016

(c) by Christian Bauer
Prof. Dr. Christian Bauer
Chair of monetary economics
Trier University
D-54296 Trier
Tel.: +49 (0)651/201-2743
E-mail: Bauer@uni-trier.de
URL: https://www.cbauer.de