Latest Press Releases

Numerous regulations and tax changes are making income tax returns increasingly complex and non-transparent. Reports of other people’s uncertainty about declaring their taxable income can undermine taxpayers’ individual tax morale. They become more lenient towards tax evasion as the tax problems of others become more understandable. This effect is even stronger for older people and those with a more left-wing political orientation, according to a study by ZEW Mannheim. For the study, more than 4,000 German citizens were interviewed in a representative survey.

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Many countries have seen a rapid surge in public debt levels due to the coronavirus pandemic. It comes therefore as little surprise that corporate taxation has become a focus of interest among policymakers as an alternative source of income to bridge these massive financing gaps in public budgets. While previous discussions have mainly focused on how to prevent a global decrease in corporate tax rates as economies try to increase their attractiveness as a business location, the recent shift in tax policy in the US and the UK have steered the discussion into a new direction. With both the UK and the US taking steps to raise company taxes, the question of whether businesses should be required to share the responsibility of covering COVID-19-related deficits through higher taxes could also become more relevant in Germany.    

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Regional economic development pays off: it secures employment in structurally weak areas and reduces regional inequality – at a lower cost than other policy measures such as increasing unemployment benefits. If, on the other hand, the subsidy is reduced, employment falls. This is the result of a recent study by ZEW Mannheim in cooperation with the University of Mannheim, which examines subsidies under the German policy measure to improve regional economic structures, “Verbesserung der regionalen Wirtschaftsstruktur” (GRW), from 1997 to 2017. The ZEW study is based on data from the Institute for Employment Research and the Federal Statistical Office.

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The coronavirus crisis is hitting companies hard. This also affects M&A deals. The number of mergers and acquisitions (M&A) involving German firms has fallen sharply due to the COVID-19 pandemic. A similar trend can be observed in M&A transactions at the international level. The number of mergers and acquisitions by and with companies based in North America, China or Western Europe decreased significantly as well. This is the result of a recent analysis by ZEW Mannheim based on the Zephyr database of Bureau van Dijk, a Moody’s Analytics Company.

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Despite the upswing in the US labour market, the US Federal Reserve has decided to keep its benchmark rate unchanged in a range of 0.0 and 0.25 per cent and not to slow down its asset purchases. Professor Friedrich Heinemann, head of the ZEW Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, comments on this matter:

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Despite the upswing in the US labour market, the US Federal Reserve has decided to keep its benchmark rate unchanged in a range of 0.0 and 0.25 per cent and not to slow down its asset purchases. Professor Friedrich Heinemann, head of the ZEW Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, comments on this matter:

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The right way to deal with the high sovereign debt levels of many eurozone countries in the post-Covid era is the focus of a discussion today at an English-language seminar organized by ZEW Mannheim and EconPol Europe in cooperation with the Brigitte Strube Foundation. The panelists are Dr. Cinzia Alcidi, Director of Research, Head of the Economic Policy Unit at the Centre for European Policy Studies (CEPS) in Brussels; Prof. Volker Wieland, Ph.D., Professor of Monetary Economics at Goethe University Frankfurt and member of the German Council of Economic Experts; and Prof. Dr. Friedrich Heinemann, Head of Research and expert on Public Finance at ZEW. Commenting on the possible handling of government debt in the eurozone, Heinemann says:

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German consumers are more strongly affected by rising markups in trade, real estate and housing, healthcare and social services, and other services than the economy as a whole. And this trend is steadily increasing. In particular, households with low incomes, such as retired households, are negatively affected by such markups, according to a study by ZEW Mannheim commissioned by the Federal Ministry of Justice and Consumer Protection. Reasons for this include the increasing market power of companies and corporate concentration.

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Around 420,000 German households over the age of 65 worry about their income, even though they have no outstanding debt on their homes. In contrast to other retirement planning schemes, the market for reverse mortgages is not well developed. According to ZEW researchers, the reasons for this lie with both consumers and providers. As their study suggests, the market potential of reverse mortgages could grow significantly in the future.

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As expected, the Governing Council of the European Central Bank (ECB) decided to make no changes to its monetary policy tools today. The Eurosystem will continue to manage its bond purchases under the PEPP crisis programme in order to prevent a significant rise in interest rates. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, comments on this matter.

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