The Flat Tax Reform: A General Equilibrium Evaluation For Spain
This paper quantifies the macroeconomic and distributional implications of an array of flat tax reforms for Spain. A standard general equilibrium economy with heterogeneous agents is used to infer the behavioral parameters of individuals and to evaluate the impact of the tax reforms. We find that a revenue neutral reform with a marginal tax equal to 17.42% and a fixed deduction equal to 15% of per capita income will yield increases in aggregate consumption and labor productivity equal to 7.6% and 2.5% respectively. Admittedly, this type of reforms also generate increases in the gini indices of after tax income and consumption. However, a revenue neutral flat tax reform with a marginal tax equal to 23.37% and a fixed deduction equal to 35% still displays aggregate gains and has the good property that people in the lowest quintile of wage distribution pay lower taxes and enjoy higher consumption than under the current income tax.
|Date of creation:||May 2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.cemfi.es/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Huggett, Mark, 1993. "The risk-free rate in heterogeneous-agent incomplete-insurance economies," Journal of Economic Dynamics and Control, Elsevier, vol. 17(5-6), pages 953-969.
- Javier Suarez & Andres Almazan & Sheridan Titman, 2004.
"Stakeholders, Transparency And Capital Structure,"
- Almazan, Andres & Suarez, Javier & Titman, Sheridan, 2004. "Stakeholders, Transparency and Capital Structure," CEPR Discussion Papers 4181, C.E.P.R. Discussion Papers.
- Andres Almazan & Javier Suarez & Sheridan Titman, 2003. "Stakeholder, Transparency and Capital Structure," NBER Working Papers 10101, National Bureau of Economic Research, Inc.
- Sascha O. Becker & Samuel Bentolila & Ana Fernandes & Andrea Ichino, 2004.
"Job Insecurity and Children's Emancipation,"
CESifo Working Paper Series
1144, CESifo Group Munich.
- Becker, Sascha O. & Bentolila, Samuel & Fernandes, Ana & Ichino, Andrea, 2004. "Job Insecurity and Children’s Emancipation," IZA Discussion Papers 1046, Institute for the Study of Labor (IZA).
- Sascha O. Becker & Samuel Bentolila & Ana Fernandes & Andrea Ichino, 2004. "Job Insecurity And Children'S Emancipation," Working Papers wp2004_04, CEMFI.
- Samuel Bentolila & Juan F. Jimeno, 2003.
"Spanish Unemployment: The End of the Wild Ride?,"
CESifo Working Paper Series
940, CESifo Group Munich.
- Ana Fernandes, 2004.
"Knowledge, Technology Adoption And Financial Innovation,"
- Ana Fernandes, 2005. "Knowledge, Technology Adoption and Financial Innovation," Diskussionsschriften dp0513, Universitaet Bern, Departement Volkswirtschaft.
- Elizalde, Abel & Repullo, Rafael, 2004.
"Economic and Regulatory Capital: What is the Difference?,"
CEPR Discussion Papers
4770, C.E.P.R. Discussion Papers.
- Abel Elizalde & Rafael Repullo, 2004. "Economic And Regulatory Capital. What Is The Difference?," Working Papers wp2004_0422, CEMFI.
When requesting a correction, please mention this item's handle: RePEc:cmf:wpaper:wp2005_0505. See general 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: (Araceli Requerey)
If references are entirely missing, you can add them using this form.