News Archive

The latest issue of the EconPol Newsletter has just been published. Included are a series of new Expert Opinions, two new Policy Briefs on excess profits taxes and the costs of European disintegration. Finally, it features thenew issue of the EconPol Forum, which discusses the question of how to reconstruct Ukraine.

The war in Ukraine is not over yet. Nevertheless, a possible roadmap and proposals for post-war reconstruction strategies are currently being discussed. They should be accompanied by economic and political reforms in the country. To finance this project, Ukraine will need to tap a variety of sources and institutions. This is because it will require investments in the hundreds of billions ‒ perhaps even trillions ‒ of US dollars. The EU, the US and other Western countries have signaled their willingness to provide further financial support for postwar reconstruction.

In the new EconPol Forum Sebastian Blesse and André Diegmann analyze the effects of police infrastructure on crime occurrence. Attempts to cut back on police infrastructures in the area in favor of supposed efficiency gains can therefore be accompanied by considerable side effects – in the form of an increase in reported property crimes. Thus, the present results can inform policymakers and practitioners about possible unintended side effects of efficiency-oriented restructuring of administrative infrastructures.

Income inequality has increased in Germany. A new analysis shows that in 1998, the richest 10 percent of taxpayers earned 33.8 percent of total income. In 2016, that figure rose to 37.2 percent. Over the same period, the poorest 50 percent’s share of income fell from 19.3 percent to 15.9 percent. Differences in income within municipalities account for more than 95 percent of national inequality. On average, incomes in municipalities in western Germany are less equally distributed than in eastern Germany. Moreover, there are also differences between different cities.

Excess profit taxes (EPTs) emerge as an option to contribute to the extra needed revenues, avoiding a general increase in corporate tax rates, while having the prospect to serve as a gateway to converge toward a permanent efficient rent tax instead of the corporate income tax. General unilateral (temporary or permanent) EPTs would face the same international pressures from profit shifting and tax competition as the existing corporate income tax, calling for international coordination.