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Recent findings regarding the shift from direct to indirect taxation in the EA-17

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  • Bernardi, LUIGI

Abstract

The relative merits of direct vs. indirect taxes have been largely debated since the advent of public finance theory. The current phase of the discussion concerns the relative ability of these two kinds of taxes to creating a more growth-friendly environment. The prevailing view favours indirect taxation, and suggests a shift of the fiscal burden towards indirect taxes, especially those on consumption. We shall be looking only briefly at this last question, as this paper has two other principal aims. The first aim is to evaluate the entity of the said tax shift over the last decade across Euro Area (EA-17) member countries. Our conclusion is that a “true” tax shift has not been as widespread and large as the EU Commission believes. Secondly, among the most widely-debated issues concerning the tax shift, we are going to examine the contrasting short-term impacts on the economy resulting from it, and we shall outline the possible risk that, in the short term, this tax shift may exacerbate the economic slump spreading across the European Union, particularly as an effect of the general adoption of restrictive fiscal policies by almost all member countries

Suggested Citation

  • Bernardi, LUIGI, 2013. "Recent findings regarding the shift from direct to indirect taxation in the EA-17," MPRA Paper 47877, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:47877
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    File URL: https://mpra.ub.uni-muenchen.de/47877/1/MPRA_paper_47877.pdf
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    References listed on IDEAS

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    1. Luigi, Bernardi, 2002. "Tax systems and tax reforms in Europe: Italy," MPRA Paper 18045, University Library of Munich, Germany.
    2. Cnossen,Sijbren, 2002. "Tax policy in the european union, A review of issues and options," Research Memorandum 023, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    3. Günter Coenen & Christopher J. Erceg & Charles Freedman & Davide Furceri & Michael Kumhof & René Lalonde & Douglas Laxton & Jesper Lindé & Annabelle Mourougane & Dirk Muir & Susanna Mursula & Carlos d, 2012. "Effects of Fiscal Stimulus in Structural Models," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(1), pages 22-68, January.
    4. Bernardi, L., 2012. "Heterogeneity of taxation in EA Member countries and some implications for EA fiscal governance," MPRA Paper 40050, University Library of Munich, Germany.
    5. Boadway, Robin, 2012. "From Optimal Tax Theory to Tax Policy: Retrospective and Prospective Views," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262017113, January.
    6. Luigi, Bernardi, 2011. "Economic crisis and taxation in Europe," MPRA Paper 31007, University Library of Munich, Germany.
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    Cited by:

    1. repec:nax:conyad:v:62:y:2017:i:3:p:1041-1057 is not listed on IDEAS
    2. Tkačevs, Olegs & Christodoulopoulou, Styliani & Bobeica, Elena, 2016. "The role of price and cost competitiveness for intra- and extra-euro area trade of euro area countries," Working Paper Series 1941, European Central Bank.
    3. Bernardi, Luigi, 2014. "Tax reforms in EU Member States subce rhe turn of the New centuri: selected observations," MPRA Paper 56856, University Library of Munich, Germany.
    4. Luigi Bernardi, 2016. "2014-2015 tax changes in EU Member States vs the Commission’s tax policy recommendations," Working papers 46, Società Italiana di Economia Pubblica.
    5. Luigi Bernardi, 2014. "Tax Reforms in the EU Member States Since the Turn of the New Century: Selected Observations," Working papers 2, Società Italiana di Economia Pubblica.
    6. Alessandro Brunetti & Maria Grazia Calza, 2015. "Redistributive effects of changes in indirect taxation," Rivista di statistica ufficiale, ISTAT - Italian National Institute of Statistics - (Rome, ITALY), vol. 17(2), pages 67-75.
    7. Soldatos, Gerasimos, 2014. "Indirect Tax Incidence under Inelastic Underground Economy Demand," MPRA Paper 64598, University Library of Munich, Germany.

    More about this item

    Keywords

    Direct taxes; indirect taxes; Euro Area;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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