Effects of flat tax reforms in Western Europe
AbstractRecent success of the flat income tax in Eastern Europe raises questions about whether there is scope for such a policy reform in Western Europe as well. We address this by estimating the potential distributional impact of various flat taxes for selected Western European countries. Our simulations show that in specific circumstances a revenue neutral flat tax reform can increase income equality and improve work incentives; however, in most cases there is an equity-efficiency trade-off. We show that the specific flat tax design and the welfare state regime play a key role.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Policy Modeling.
Volume (Year): 31 (2009)
Issue (Month): 5 (September)
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Web page: http://www.elsevier.com/locate/inca/505735
Flat tax reform Income inequality Labour supply incentives Microsimulation;
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