Herausforderungen des interkommunalen Gewerbesteuerwettbewerbs

This study examines the tension inherent in inter-municipal competition based on business rates. Whilst this is intended to transfer financial responsibility to the local authorities, it simultaneously jeopardises the funding of essential services in those local authorities that emerge as the losers in this competition.
Starting from the prerequisites for inter-municipal competition that serves the public good, the author examines its current shortcomings. These stem from the municipalities’ range of responsibilities, their funding structure, and the scope for policy-making that trade tax itself affords. To address these shortcomings, the author proposes solutions grounded in both tax law and constitutional finance law.