Tax Reform

Prof. Dr. Christian Keuschnigg, Institute for Advanced Studies, presentation on "Tax Reform: One Design Instead of Piecemeal Reform".

Professor Keuschnigg received the trade delegates in one of the traditional lecture rooms of IHS (Institut für Höhere Studien / Institute for Advanced Studies), where he gave his presentation expounding various realities of taxation systems.

IHS is an independent, non-profit research institute covering the areas of economics, political science, and sociology. Since its inception in 1963 the IHS has been committed to the highest quality standards of research and postgraduate education. The institute provides international organisations and the Austrian government with theoretical and empirical research with relevance to socio-political and economic policy, and delivers internationally renowned training programs. Prof. Keuschnigg, together with about 100 employees of the IHS, provides scientific policy advice based on rigorous empirical and theoretical foundations in economics, political science and sociology; and, last but not least, it is the duty of the IHS to inform the public about fundamental economic and social problems and policy choices.

"The design of tax codes contributes to the prime goals of a government", Keuschnigg explained and he gave an overview of the Austrian tax system and how it compared to other tax regimes:  Corporate profits are taxed with a standard tax rate of 25 percent - relatively attractive for businesses, even in comparison to the new EU member states. Additional levies such as trade or net worth taxes - the norm in many other countries - don't exist here. Personal wage income tax is progressive in Austria. He also laid emphasis on Austrian strengths (like group taxation rules) and weaknesses (such as the bias towards debt financing), and said that Austria achieves the greatest degree of income redistribution among OECD countries - not only regarding financial wealth, but people's total wealth.

Preferring competition among governments, Prof. Keuschnigg also gave a short tax structure comparison of various countries, whereupon a lively discussion about the "right taxation system", comparing various countries like Switzerland or the U.S. started among his guests.

Growing inter-dependencies within Europe, as well as on a global scale, are increasing the importance of institutions like IHS, which place emphases on inter-disciplinary comparative research, international teaching, and intellectual exchange.