IESET.
Hypotheses·distribution·tax_inequality_germany_2000_schroder_reform

The 2000 Schroder corporate + personal tax reform package (top personal rate cut from 53 to 42 percent staged 2000-2005, corporate rate cut from 40 to 25 percent, capital-gains exemption on inter-corporate shareholdings) is associated with a 1.0 to 1.5 percentage point rise in the German top-1 pre-tax income share over 2000-2008 vs Eurozone synthetic control, but no measurable rise in aggregate output growth beyond Eurozone trend.

The test pairs distributional response vs growth response.

PARTIALengine/runs/tax_inequality_germany_2000_schroder_reform

PARTIAL — mean_gap=+0.3903, |gap|/pre_sd=0.43, p_perm=0.4 (gap below 0.5×pre_sd or placebo p≥0.10)

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. mean_gap=+0.3903, |gap|/pre_sd=0.43, p_perm=0.4 (gap below 0.5×pre_sd or placebo p≥0.10)

why it matters

Distributional claims often sound morally clear but are empirically complex. This test asks whether the proposed channel explains real differences across places.

how the test works

It compares 9 country or place units from 1990 to 2010, using a synthetic control design, with fixed effects for country and year.

what was measured
What changed
  • Schroder 2001 deu post
  • Top marginal income tax rate
What we checked
  • Top 1pct pretax income share
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/tax_inequality_germany_2000_schroder_reform
1007550250199020002010DEUFRAITAESPNLDBELAUT
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show top_1pct_pretax_income_share across 9 sampled countries over 1990–2010.
The shapes above are stylised — none of the lines are real data.
Placeholder for tax_inequality_germany_2000_schroder_reform. Published chart will be generated from engine/runs/tax_inequality_germany_2000_schroder_reform/chart_data.json.

Pre-registration

pre-registered
first-spec commit 098ce96 · 2026-04-30T12:57:33Z
run generated · 2026-04-30T12:29:43Z

The 2000 Schroder corporate + personal tax reform package (top personal rate cut from 53 to 42 percent staged 2000-2005, corporate rate cut from 40 to 25 percent, capital-gains exemption on inter-corporate shareholdings) is associated with a 1.0 to 1.5 percentage point rise in the German top-1 pre-tax income share over 2000-2008 vs Eurozone synthetic control, but no measurable rise in aggregate output growth beyond Eurozone trend. The test pairs distributional response vs growth response.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if German top-1 pretax share rises by at least 1 percentage point vs Eurozone synthetic over 2000-2008 at p<0.10. REFUTED if no detectable gap or negative gap at the eight-year horizon.

formal test & threshold
test:      Synthetic-control with Eurozone donor pool, treated DEU 2001.

Method

Template
synthetic_control
Fixed effects
country, year
Clustering
country
Sample
9 countries · 1990 – 2010
Evidence type
associational

Synthetic-control with Eurozone donor pool. Robustness with synth_did.

Data

VariableSourceTransform
top_1pct_pretax_income_share
outcome
owid:top-1-share-of-total-incometier 2
level
schroder_2001_deu_post
treatment
constructed:indicator = 1 for DEU, year >= 2001tier 5
indicator
top_marginal_income_tax_rate
treatment
owid:top-marginal-income-tax-ratetier 2
level
log_real_gdp_per_capita
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — tax_inequality_germany_2000_schroder_reform

Verdict: PARTIAL — mean_gap=+0.3903, |gap|/pre_sd=0.43, p_perm=0.4 (gap below 0.5×pre_sd or placebo p≥0.10)

Pre-registration

  • Claim: The 2000 Schroder corporate + personal tax reform package (top personal rate cut from 53 to 42 percent staged 2000-2005, corporate rate cut from 40 to 25 percent, capital-gains exemption on inter-corporate shareholdings) is associated with a 1.0 to 1.5 percentage point rise in the German top-1 pre-tax income share over 2000-2008 vs Eurozone synthetic control, but no measurable rise in aggregate output growth beyond Eurozone trend. The test pairs distributional response vs growth response.
  • Falsification rule: SUPPORTED if German top-1 pretax share rises by at least 1 percentage point vs Eurozone synthetic over 2000-2008 at p<0.10. REFUTED if no detectable gap or negative gap at the eight-year horizon.

Synthetic-control estimate

  • shape: synth_did
  • treated_country: DEU
  • event_year: 2000
  • n_donors: 4
  • donor_weights (top): {'ESP': 0.5179, 'FRA': 0.4821, 'FIN': 0.0, 'IRL': 0.0}
  • pre_rmse: 0.953333711090633
  • pre_period_sd: 0.897908681325668
  • mean_post_gap: 0.39031181481745314
  • end_period_gap: 1.5806955526642383
  • post_period_years: [2000, 2010]
  • placebo_p_value: 0.4
  • n_placebos: 4
  • method: synthetic-control via NNLS, permutation inference

Variables resolved

  • owid:top-1-share-of-total-income → top_1pct_pretax_income_share (outcome, n=3294)
  • owid:top-marginal-income-tax-rate → top_marginal_income_tax_rate (treatment, n=590)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_real_gdp_per_capita (controls, n=14066)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, n=10714)

Generated by scripts/run_synth_did.py at 2026-04-30T12:29:43+00:00

Notes

Tax-inequality candidate, swarm-S6 batch 3. Distinct from any growth- effect spec; outcome here is distributional.

Authored framework. Read the transparency note.