This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

A simulation of the effects of the personal income tax reform on the tax burden

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Isabel Argimón () (Banco de España)
Francisco de Castro () (Banco de España)
Ángel Luis Gómez () (Banco de España)

Additional information is available for the following registered author(s):

Abstract

The new Personal Income Tax Law came into force in January 2007. The main changes with respect to the previous regulation are the new tax treatment of personal and family circumstances and saving returns. This study aims to quantify the overall effect of the reform on tax revenue and to assess its redistributive impact by considering the different main income sources. In order to attain these objectives, we have used an Instituto de Estudios Fiscales sample of 2002 income tax returns to construct a baseline scenario for 2007 to simulate the reform. The reform will involve a moderate tax cut in relation to the baseline scenario. However, in relative terms, the tax reduction will be especially intense for lowest income and joint returns. Pensioners, recipients of business and professional incomes and dependent employees, though to a lower extent, would benefit from lower taxes. Lastly, the reform of the personal income tax is estimated to increase progressivity moderately, although lower tax revenues will imply lower redistributive capacity.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.bde.es/informes/be/ocasional/do0702.pdf
File Format: application/pdf
File Function: First spanish version, March 2007
Download Restriction: no

Publisher Info
Paper provided by Banco de España in its series Banco de España Occasional Papers with number 0702.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 60 pages
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:bde:opaper:0702

Contact details of provider:
Email:
Web page: http://www.bde.es/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (María D. González. Electronic Dissemination of Information Unit. Research Department. Banco de España).

Related research
Keywords: personal income tax reform; cost of the reform; effective tax rates; income sources; population deciles;

Find related papers by JEL classification:
H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

This paper has been announced in the following NEP Reports:

Statistics
Access and download statistics

Did you know? You too can volunteer for RePEc, for example by editing a NEP report.

This page was last updated on 2009-12-8.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.