The year-2000 tax reform – together with the "family package" – will reduce the tax burden on private households and enterprises by ATS 32.5 billion on a medium-term basis. ATS 17 billion result from the loss of wage and income tax revenues due to the reform of the income tax-rate table, ATS 12 billion from additional transfer payments to families ("family package"), and ATS 3.5 billion from other measures taken to make Austria more attractive as a business location and to promote employment. Relative to the gross domestic product, this tax reform is more comprehensive than the 1989 and 1994 reforms. Its growth stimuli are derived, above all, from private consumption. Overall, the reform will result in a medium-term growth of GDP by 0.4 percent on a cumulative basis by 2005.
The year-2000 tax reform – together with the package of family-related measures – will result in medium-term income gains for private households and enterprises of ATS 32.5 billion. ATS 17 billion are accounted for by wage and income tax reductions due to the reform of the income-tax rates, ATS 12 billion by transfer payments to families ("family package"), and ATS 3.5 billion by other measures taken to increase the attractiveness of Austria as an industrial location and to create employment. Relative to the gross domestic product, this tax reform is more comprehensive than the previous ones implemented in 1988 and 1994. The main emphasis of the reform is on easing the tax burden on private households. Consumer demand will increase by a cumulative 1.8 percent in real terms by 2005. With direct incentives for investors being extremely modest, investments are expected to grow by no more than 0.6 percent on a medium-term basis. Higher domestic demand, which also results in higher imports, will generate a cumulative growth of real GDP of 0.4 percent by 2005. Hence, the labour market can absorb another 9,300 employees. Price increases will be insignificant at 0.2 percent. The current-account and public deficits (net lending) will increase by 0.5 percent and 0.7 percent of GDP, respectively.
Gesamtwirtschaftliche Auswirkungen der Steuerreform 2000; Macroeconomic Effects of the Year-2000 Tax Reform
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