Abstract
Tax policy is generally evaluated from various perspectives: the impact of tax changes on the funding of government activities; effects on economic indicators such as employment and growth; and distributional consequences—all while aiming to avoid excessive complexity in tax rules. However, tax policy objectives can sometimes conflict with one another. For instance, simplifying the tax system might require paying less heed to taxpayers’ varying personal circumstances. What role can policy advice play here? Examples such as the fuel tax rebate, “bracket creep” (fiscal drag), and the financing of rising government expenditure illustrate that policy advice in this area should not focus on recommending specific tax proposals, but rather on clarifying the consequences associated with various courses of action.
© 2026 Clemens Fuest, published by ZBW – Leibniz-Informationszentrum Wirtschaft
This work is licensed under the Creative Commons Attribution 4.0 License.
