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Dynamic scoring of tax reforms in the European Union

Author

Listed:
  • Salvador Barrios
  • Mathias Dolls

    ()

  • Anamaria Maftei
  • Andreas Peichl

    ()

  • Sara Riscado
  • Janos Varga
  • Christian Wittneben

    ()

Abstract

In this paper, we present the first dynamic scoring exercise linking a microsimulation and a dynamic general equilibrium model for Europe. We illustrate our novel methodology analysing hypothetical reforms of the social insurance contributions system in Belgium. Our approach takes into account the feedback effects resulting from adjustments and behavioral responses in the labor market and the economy-wide reaction to the tax policy changes, essential for a comprehensive evaluation of the reforms. We find that the self-financing effect of a reduction in employers’ social insurance contribution is substantially larger than that of a comparable reduction in employees’ social insurance contributions.

Suggested Citation

  • Salvador Barrios & Mathias Dolls & Anamaria Maftei & Andreas Peichl & Sara Riscado & Janos Varga & Christian Wittneben, 2018. "Dynamic scoring of tax reforms in the European Union," ifo Working Paper Series 251, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
  • Handle: RePEc:ces:ifowps:_251
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    Cited by:

    1. Michal Horvath & Matus Senaj & Zuzana Siebertova & Norbert Svarda & Jana Valachyova, 2018. "Evaluating the Aggregate Effects of Tax and Benefit Reforms," Working Papers Working Paper No. 1/2018, Council for Budget Responsibility.
    2. Andreas Peichl, 2016. "Linking Microsimulation and CGE models," International Journal of Microsimulation, International Microsimulation Association, vol. 9(1), pages 167-174.
    3. repec:euf:pfremu:pfr-2017-01 is not listed on IDEAS

    More about this item

    Keywords

    Tax Reform; European Union.;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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