Kinderbonus 2021 vs. Kinderbonus 2022: Unterschiedliche Kompensationslösungen des Bundes und ihre Auswirkungen auf die Einnahmen der Länder (inklusive Gemeinden)

In recent years, the federal government has repeatedly paid a bonus for each child from wage tax and income tax funds, which has led to reduced income for the federal states and municipalities due to the percentage share in these taxes. The federal states, including their municipalities, are affected differently by the reduced tax revenue. This is due to the fact that the number of children differs between the federal states. But it is also due to the fact that the child bonus is treated like child benefit and thus reduces the tax relief effect of the child allowances. The effect of the child allowances dependents on the level of income, which also differs between the federal states.

Since the federal government has agreed to bear these child bonus payments in full, compensation money was paid, with which the reduced income of the federal states and municipalities was almost completely compensated. Two different mechanisms have been used to distribute these compensation funds to the federal states and municipalities. These two approaches lead to different distribution effects, whereby a distinction must be made between direct effects (mechanisms for distributing funds to the federal states and their municipalities) and indirect effects (fiscal equalization system between the states). This article examines which of the two approaches leads to more precise compensation in the federal states (inclusive municipalities), in the sense that the difference in income per inhabitant is kept small compared to the situation without a child bonus.