Discussion Paper of the Institute for Organisational Economics 2/2013

Composition Effects of the German Federal Government
on the Average Top Income Tax Burden

Katrin Scharfenkamp
February 2013



This paper investigates whether the setting of the German top income tax burden is affectedby the composition of the Federal Government in terms of connectedness with the national(academic) elite andcompany network from 1958 to 2011. The results reveal that thepercentages of university graduates, former executive board members, as well as thegovernment’s average age at the time of decision are related to a lower average top incometax burden. Conversely and surprisingly, an increasing percentage of former members of asupervisory board is associated with a higher average top income tax burden. Interestingly,varying percentages of governmental members with an elitist social background are notaligned with the tax setting. Finally, the higher the difference of mandates between CDU &CSU and those of the SPD in the German Parliament, the lower is the average top income taxburden.