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Effects of flat tax reforms in Western Europe

Paulus, Alari and Peichl, Andreas (2009) 'Effects of flat tax reforms in Western Europe.' Journal of Policy Modeling, 31 (5). pp. 620-636. ISSN 0161-8938

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Recent success of the flat income tax in Eastern Europe raises questions about whether there is scope for such a policy reform in Western Europe as well. We address this by estimating the potential distributional impact of various flat taxes for selected Western European countries. Our simulations show that in specific circumstances a revenue neutral flat tax reform can increase income equality and improve work incentives; however, in most cases there is an equity-efficiency trade-off. We show that the specific flat tax design and the welfare state regime play a key role. © 2009 Society for Policy Modeling.

Item Type: Article
Uncontrolled Keywords: Flat tax reform; Income inequality; Labour supply incentives; Microsimulation
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HJ Public Finance
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Institute for Social and Economic Research
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 18 Jul 2013 10:00
Last Modified: 18 Aug 2022 11:13

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