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EWIGE 2 Update and Extension of the EUROMOD Wealth Taxation Project

Author

Listed:
  • Jonas Boone

    (Universiteit Antwerpen)

  • Johannes Derboven

    (Universiteit Antwerpen)

  • Sarah Kuypers

    (Universiteit Antwerpen)

  • Francesco Figari

    (Università dell'Insubria)

  • Gerlinde Verbist

    (Universiteit Antwerpen)

Abstract

Taxing wealth has received increased attention in both the academic and political debate, as a way to reduce inequality of both income and wealth. However, analytical tools are still underdeveloped when it comes to empirical analyses of different types of wealth-related taxes and policies. New household surveys as those developed as part of the Eurosystem Household Finance and Consumption Survey (HFCS) represent a milestone for this purpose. Yet, distributional analysis of income and wealth requires information on disposable income and wealth which are not available, as the new Eurosystem data includes only gross income values. Moreover, in order to simulate the effects of wealth taxes and (budget neutral) reforms to the current direct taxes a microsimulation model such as EUROMOD is needed. Integrating the HFCS data in EUROMOD makes it possible to assess the effect of different current and hypothetical wealth taxes and policies on the distribution of income and wealth. In this report we build further on a pilot study (see Kuypers et al., 2017), in which the HFCS data have been converted into a EUROMOD database for six countries that were part of the first wave of the HFCS. More specifically, the HFCS-EUROMOD combination is applied for the second wave of the HFCS data and the scope has been broadened to 17 EU countries (6 original from the pilot study and 11 new ones). We discuss the process of how the HFCS data have been transformed to fit the EUROMOD context, how the simulation of wealth taxes and policies has been added to the EUROMOD country files and we assess how the simulation results compare with other available sources. Finally, we also briefly discuss an example of a simulation that can be performed by using the new tool.

Suggested Citation

  • Jonas Boone & Johannes Derboven & Sarah Kuypers & Francesco Figari & Gerlinde Verbist, 2019. "EWIGE 2 Update and Extension of the EUROMOD Wealth Taxation Project," JRC Working Papers on Taxation & Structural Reforms 2019-07, Joint Research Centre.
    • Handle: RePEc:ipt:taxref:201907
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    File URL: https://publications.jrc.ec.europa.eu/repository/handle/JRC117204
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    References listed on IDEAS

    as
    1. Sarah Kuypers & Francesco Figari & Gerlinde Verbist & Dorien Verckist, 2017. "EWIGE - European Wealth data InteGration in EUROMOD," JRC Working Papers on Taxation & Structural Reforms 2017-04, Joint Research Centre.
    2. Christopher May, 2017. ": 40 years on," Third World Quarterly, Taylor & Francis Journals, vol. 38(10), pages 2223-2241, October.
    3. Antony Young, 2014. "1 + 1 = 3," Palgrave Macmillan Books, in: Brand Media Strategy, edition 0, chapter 0, pages 81-99, Palgrave Macmillan.
    4. Holly Sutherland & Francesco Figari, 2013. "EUROMOD: the European Union tax-benefit microsimulation model," International Journal of Microsimulation, International Microsimulation Association, vol. 1(6), pages 4-26.
    5. Ey, 2014. "Cross-country Review of Taxes on Wealth and Transfers of Wealth," Taxation Studies 0051, Directorate General Taxation and Customs Union, European Commission.
    6. European Commission, 2009. "Taxes in Europe Database," Taxes in Europe Database 0001, Directorate General Taxation and Customs Union, European Commission, revised Jun 2020.
    7. Sarah Kuypers & Francesco Figari & Gerlinde Verbist, 2016. "The Eurosystem Household Finance and Consumption Survey: A New Underlying Database for EUROMOD," International Journal of Microsimulation, International Microsimulation Association, vol. 9(3), pages 35-65.
    8. Figari, Francesco & Sutherland, Holly & Levy, Horacio, 2007. "Using the EU-SILC for policy simulation: prospects, some limitations and some suggestions," EUROMOD Working Papers EM1/07, EUROMOD at the Institute for Social and Economic Research.
    9. James B. Davies & Susanna Sandström & Anthony Shorrocks & Edward N. Wolff, 2011. "The Level and Distribution of Global Household Wealth," Economic Journal, Royal Economic Society, vol. 121(551), pages 223-254, March.
    10. Alastair Thomas & Isabelle Joumard & Tibor Hanappi & Michelle Harding, 2017. "Taxation and Investment in India," OECD Economics Department Working Papers 1397, OECD Publishing.
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    Cited by:

    1. Catarina Midões & Mateo Seré, 2022. "Living with Reduced Income: An Analysis of Household Financial Vulnerability Under COVID-19," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 161(1), pages 125-149, May.
    2. Alexander Krenek & Margit Schratzenstaller-Altzinger & Klaus Grünberger & Andreas Thiemann, 2021. "INTAXMOD – Inheritance and Gift Taxation in the Context of Ageing," WIFO Working Papers 645, WIFO.
    3. Sarah Kuypers & Gerlinde Verbist, 2022. "Over-indebtedness and poverty : Patterns across household types and policy effects," Working Paper Research 420, National Bank of Belgium.

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