The fiscal and distributional impact of possible tax reforms in the Netherlands
AbstractThis paper uses the tax-benefit microsimulation model EUROMOD to assess how three types of tax reform would affect the state budget and the income distribution in the Netherlands. After briefly introducing the Dutch tax system and the case for and against these reforms, we investigate the effects of (1) introducing a flat income tax rate, (2) reducing the mortgage interest deduction and (3) shifting the state pension contribution to income tax, and of combining these reforms. Notably, the analysis does not include possible effects of these reforms on, e.g., the labour market and/or the housing market, but assesses the ceteris paribus effects of the reforms on the state budget and on poverty and inequality.Depending on the choice of the various parameters of the reforms both the budgetary and the distributional effects may vary widely. We show that the budget deficit may increase or decrease in combination with both increases and decreases in inequality and poverty. So, an optimal tax reform could be chosen depending on the preferences with respect to the budget and the income distribution.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by EUROMOD at the Institute for Social and Economic Research in its series EUROMOD Working Papers with number EM9/12.
Date of creation: 18 Dec 2012
Date of revision:
Publication status: published
Contact details of provider:
Postal: RAB Butler Building, University of Essex, Wivenhoe Park, Colchester, ESSEX C04 3SQ
Phone: +44 (0)1206 872957
Fax: +44 (0)1206 873151
Web page: https://www.iser.essex.ac.uk/euromod/
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ACC-2013-01-19 (Accounting & Auditing)
- NEP-ALL-2013-01-19 (All new papers)
- NEP-CMP-2013-01-19 (Computational Economics)
- NEP-PBE-2013-01-19 (Public Economics)
- NEP-PUB-2013-01-19 (Public Finance)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Groves).
If references are entirely missing, you can add them using this form.