Michael Stimmelmayr undertakes the intricate task of analyzing the outcome and especially the efficiency gains of capital income tax reforms. The simultaneous alteration of several tax rates will induce multiple economy wide repercussions, as firms and households change their optimal behaviour due to taxation. Therefore, a dynamic computable general equilibrium (CGE) model is the only instrument which allows for a consistent quantification of all short and long run effects arising from capital income tax reforms. The author guides the reader through the setting-up of a dynamic CGE model - which was cited by German Council of Economic Advisors as the "most advanced version" in the group of dynamic CGE models - and discusses the simulation outcome of different German tax reforms and tax reform proposals such as the 2000 German Tax Reform, a flat tax of 25% (Kirchhof's Einfachsteuer) as well as a consumption based tax system.weiterlesen