Volltext-Downloads (blau) und Frontdoor-Views (grau)

The tax advantage of public firms over private firms in the German household solid waste disposal industry

  • We measure the tax advantage of public firms over private firms, which operate at municipality level in the German household solid waste disposal industry. Public firms with sovereign duties pay no taxes, but equivalent private firms have to. In a simple risk-free setting, we develop a measure of the percentage difference of the charges of both types of firms demanded under their respective tax treatments. We model a cost-covering public firm and a net present value maximizing private firm. For sensible model parameters from the German waste disposal industry the private firm has to demand an about 16% to 18% higher charge. The by far biggest impact on the measure has the value added tax, with revenues as a much larger tax base than profits. Tax savings, which directly affect pre-tax profits, only alleviate the disadvantage bit. There is some evidence that at least one type of private firms—that is, private law firms that are also majority privately owned, are productive enough to overcome the tax advantage of public firms and be able to charge a lower price than public firms.

Export metadata

Additional Services

Search Google Scholar


Document Type:Article
Author:Marko KrauseORCiD, Alexander LahmannORCiD
Chairs and Professorships:Chair of Mergers & Acquisitions
Parent Title (English):Annals of Public and Cooperative Economics
Year of Completion:2022
Page Number:26
Tag:Corporate tax; Private firm; Public firm; Trade tax; Value added tax
Content Focus:Practitioner Audience
Peer Reviewed:Yes
Rankings:AJG Ranking / 2
SJR Ranking / Q2
Licence (German):License LogoCreative Commons - CC BY-NC-ND - Namensnennung - Nicht kommerziell - Keine Bearbeitungen 4.0 International