Theoretical Key Elements for a Fundamental Reform of Federal Fiscal Relations

The new revenue sharing system that became effective at the beginning of 2008 in Austria is planned to apply for six years and essentially continues the system in place up to now with a few innovations to the current structures. However, during the first three-year period, a commission of experts is to present proposals for a fundamental reform of the system of federal fiscal relations. From a theoretical perspective, such a reform could comprise the following elements: the unbundling of competencies by reforming the federal state, strengthening sub-central government's tax autonomy as well as a reform of the progressive population factor and the system of vertical grants.