A "Guaranteed Income for All"

The German tax and transfer system is considered complex when compared internationally. Criticism is based on the interaction of different benefit programs and their conflicting goals regarding distributional effects and incentives.

Particularly, the interaction of the policy instruments unemployment benefits (ALG~II), housing subsidies, child allowances as well as tax exemptions regarding the income tax are causing concerns.

The report at hand analyses different reform proposals, with the integration of the individual benefit programs at its core. Contrasting the current policy, transfer payments are then to be given out automatically (e.g. via the tax authority) in order to achieve full take-up. The reformes analyzed propose a "guaranteed income for all" which is calculated and paid automatically to overcome bureaucratic obstacles in the current transfer system.