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La TVA sociale : bonne ou mauvaise idée ?

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  • Fève, P.
  • Matheron, J.
  • Sahuc, J-G.

Abstract

The quantitative and dynamic consequence of a social VAT reform, i.e. a fiscal reform consisting in substituting VAT for social contributions, is assessed using two general equilibrium models. The first one is a Walrasian model with no other frictions than distortionary taxation of labor and capital incomes and consumption. The second one introduces in addition matching frictions in the labor market. Two alternative financing schemes are considered for the practical details of implementing the social VAT. In all cases, the fiscal reform turns out to generate a small, positive long--run effect on aggregate variables and yields a modest welfare gain. In the no--friction model, this welfare gain is substantially reduced when the reform is pre--announced six quarters prior to implementation. The effect of such a pre-announced reform are smaller when labor market frictions are taken into account.

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Bibliographic Info

Paper provided by Banque de France in its series Working papers with number 244.

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Length: 31 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:bfr:banfra:244

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Keywords: social VAT; DGE; pre-announced fiscal reform.;

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  1. Picard, P.M. & Toulemonde, E., 1999. "On the Equivalence of Taxes Paid by Employers and Employees," Papers 215, Notre-Dame de la Paix, Sciences Economiques et Sociales.
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  8. Juillard, Michel, 1996. "Dynare : a program for the resolution and simulation of dynamic models with forward variables through the use of a relaxation algorithm," CEPREMAP Working Papers (Couverture Orange) 9602, CEPREMAP.
  9. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
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  11. Lucas, Robert E, Jr, 1990. "Supply-Side Economics: An Analytical Review," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 293-316, April.
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