Empirical Tax Research in Germany Federal Government Plans to Establish New Institute (IfeS)

Tax research is among the lively fields of empirical interaction between law and economic sciences. One of the authors’ faculty supervisor in the US, Jacob Goldin, quite literally made his career off of well-designed large scale field experiments in tax compliance research such as the one published in the National Tax Journal. German legal scholars also study tax compliance using experimental methods.

Yet, there is still a dearth of large-scale datasets available for empirical tax research. This is why the German government has now resolved to establish a new institute for empirical tax research called Institut für empirische Steuerforschung (IfeS). Members of the German Parliament seem to have been taken by surprise when they read about it in the newspapers in late June 2021. Upon their request, the government issued an official statement on 20 July 2021 outlining the current plans:

The research advisory board at Germany’s Federal Ministry of Finance suggested in a report dated 30 October 2020 to improve Germany’s official statistics regarding tax issues, and to establish an advisory institute to empirically evaluate the government’s tax policy. Acting upon this advice, the German government plans to establish such institute in 2022 with two objectives in mind: (1) finding ways to link datasets pursuant to GDPR, and of creating synthetical datasets and exploring the use of artificial intelligence (AI), as well as (2) facilitating evidence-based research on tax issues, and bringing that research into practical politics.

For anyone with a doctoral thesis on “evidence based jurisprudence” (see excerpt in Berkeley Business Law Journal), this is exciting and encouraging news, even if the subject matter is outside one’s own area of expertise.

At this point, the government declines to specify the location, budget or size of the planned institute, but press reports cited government informants estimating the institute’s projected size at around 70 staff members. In its statement, the government did confirm plans to provide the institute with sufficient budget to bring in international guest researchers. So keep your eyes peeled for more promising news from this direction.

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Hanjo Hamann is a professor of private law, business and intellectual property law. He is currently based at EBS University of Business and Law in Wiesbaden, Germany. He is also an editor-in-chief of the International Journal of Language & Law (JLL), and visiting researcher at the Max Planck Institute for Research on Collective Goods.
University of Potsdam
Suggested Citation
Hamann and Kraft, Empirical Tax Research in Germany, LAW’S|EMPIRICS, 07/29/21, DOI: 10.25527/re.2021.09