Vortragsankündigung: Dr. Sven Stöwhase (Fraunhofer FIT), „Empirical Evidence on the Utilization of Income Tax Deductions for Child Care Costs“

Vortragsankündigung

“Empirical Evidence on the Utilization of Income Tax Deductions for Child Care Costs”

Dr. Sven Stöwhase (Fraunhofer Institut FIT)

27. November 2013, 10 Uhr, Seminarraum 2330

Abstract:

In most developed countries there exist ample opportunities for individu- als to minimize their personal income tax burden by means of tax deduc- tions. While these opportunities typically generate significant revenue losses for the government, relatively little is known about the fraction of eligible taxpayers who actually use these opportunities, and, more spe- cifically, about what determines utilization. The present paper tries to shed some light on this question in the context of the tax deductibility of expenses for child care in Germany. Using survey data on actual child care expenses and official tax-return data on utilized deductions we deri- ve utilization rates. Moreover, we analyze the determinants for utilization among those who filed a tax-return, using a subsample of the official tax- return data. Estimation results suggest that (potential) tax savings from as well as costs associated with utilization both have a significant impact on the probability of utilization.