ABSTRACT
Fiscal federalism covers a variety of aspects. Constitutional law considerations and political decisions whether to centralise or decentralise structures as well as the assignment of fiscal relations between governmental levels play an important role. In Germany, for historical reasons, the federal character of political and administrative relations is pronounced. Consequently a highly independent and powerful position of the federal states, the Lander, is intended by the Basic Law. The exercise of governmental powers and the discharge of governmental functions is incumbent on the Lander insofar as this Basic Law does not otherwise prescribe or permit. The allotment of functions widely predetermines the structure of expenditure. On the level of the Lander three types of expenditure items can be distinguished. The distribution of tax revenue and, thus, the distribution of power on tax legislation belong to the most pressing subjects.
