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The Tax Reform 2004-05 – Measures and Macroeconomic Effects


  • Fritz Breuss


  • Serguei Kaniovski


  • Margit Schratzenstaller



The tax reform 2004-05 includes tax cuts within income taxation (€ –2.2 billion) and corporate taxation (€ –1.1 billion) as well as increases of several excise taxes (€ +232 million). The changes in the income tax rate scale taking effect in 2005 will increase tax progression and revenue elasticity vis-à-vis 2003; "cold" progression will be compensated only partially. Simulations done with the WIFO macromodel show a positive effect of the tax reform on GDP and employment. The degree of self-financing through growth-induced additional tax revenues is limited.

Suggested Citation

  • Fritz Breuss & Serguei Kaniovski & Margit Schratzenstaller, 2004. "The Tax Reform 2004-05 – Measures and Macroeconomic Effects," Austrian Economic Quarterly, WIFO, vol. 9(3), pages 127-142, August.
  • Handle: RePEc:wfo:wquart:y:2004:i:3:p:127-142

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    References listed on IDEAS

    1. Peneder, Michael, 2003. "Industrial structure and aggregate growth," Structural Change and Economic Dynamics, Elsevier, vol. 14(4), pages 427-448, December.
    2. Peter Egger, 2001. "European exports and outward foreign direct investment: A dynamic panel data approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 137(3), pages 427-449, September.
    3. Gernot Hutschenreiter & Michael Peneder, 1997. "Austria's "Technology Gap" in Foreign Trade," WIFO Monatsberichte (monthly reports), WIFO, vol. 70(2), pages 103-114, February.
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    Cited by:

    1. Josef Baumgartner & Serguei Kaniovski, 2015. "The Tax Reform 2015-16 – Macroeconomic Effects up to 2019," WIFO Bulletin, WIFO, vol. 20(12), pages 250-265, December.
    2. Margit Schratzenstaller & Andreas Wagener, 2009. "The Austrian income tax tariff, 1955–2006," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 36(3), pages 309-330, August.


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