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Benefits and problems of linking micro and macro models - evidence from a flat tax analysis

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  • Peichl, Andreas

Abstract

The aim of this paper is to describe the state-of-the-art in simulation and to illustrate benefits and problems of linking micro and macro models by analysing flat tax proposals for Germany. The analysis shows that a personal income flat tax can indeed overcome the fundamental equity efficiency trade-off while simultaneously increasing the tax revenue. However, this result does not hold for a flat tax combining a personal income flat tax with a corporate cash flow flat tax, even when allowing for an ex-post loss in revenue as the top of the distribution still gains the most.

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Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2009-02.

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Date of creation: 28 Jan 2009
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Publication status: published
Handle: RePEc:ese:iserwp:2009-02

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Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
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Citations

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Cited by:
  1. Peichl, Andreas & Schneider, Hilmar & Siegloch, Sebastian, 2010. "Documentation IZAΨMOD: The IZA Policy SImulation MODel," IZA Discussion Papers 4865, Institute for the Study of Labor (IZA).
  2. Kamel Louhichi & Hugo Valin, 2012. "Impact of EU biofuel policies on the French arable sector: A micro-level analysis using global market and farm-based supply models," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 93(3), pages 233-272.
  3. Olivier Bargain & Herwig Immervoll & Andreas Peichl & Sebastian Siegloch, 2012. "Distributional consequences of labor-demand shocks: the 2008–2009 recession in Germany," International Tax and Public Finance, Springer, Springer, vol. 19(1), pages 118-138, February.
  4. Bargain, O. & Herwig Immervoll & Andreas Peichl & Siegloch, S., 2010. "GINI DP 1: Distributional Consequences of Labor-Demand Adjustments to a Downturn. A Model-Based Approach with Application to Germany 2008-09," GINI Discussion Papers 1, AIAS, Amsterdam Institute for Advanced Labour Studies.
  5. Olivier Bargain & Herwig Immervoll & Andreas Peichl & Sebastian Siegloch, 2011. "Distributional Consequences of Labor-demand Shocks: The 2008-09 Recession in Germany," CESifo Working Paper Series 3403, CESifo Group Munich.

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