Welfare Effects of Distortionary Company Car Taxation
AbstractIn Europe, company cars are offered by employers as fringe benefits to their employees at a lower price than employees pay in the car market, mainly due to favourable taxation of company cars. We analyse the welfare effects of favourable taxation of company cars for the Netherlands. The estimated annual welfare costs of the distortionary taxation of company cars are estimated to be at least €2,000 per company car. For the whole of Europe, these welfare costs are estimated to be at least €40 billion per year.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 07-060/3.
Date of creation: 03 Aug 2007
Date of revision: 20 Mar 2009
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Company car; car ownership; car value; welfare costs;
Other versions of this item:
- Eva Gutiérrez‐i‐Puigarnau & Jos N. Van Ommeren, 2011. "Welfare Effects Of Distortionary Fringe Benefits Taxation: The Case Of Employer‐Provided Cars," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(4), pages 1105-1122, November.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Transportation: Demand, Supply, and Congestion
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Government Pricing and Policy
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