Effects of Changes in Tax/Benefit Policies in Austria 2003-2005

Abstract

The aim of this paper is to evaluate whether policy reforms in Austria between 2003 and 2005 were successful in meeting redistributive objectives and in reducing poverty. The authors use the tax/benefit micro-simulation model EUROMOD for this analysis. In the period under review the 2004-2005 tax reform was introduced and contributions to health insurance were raised. On the benefit side no major changes took place, the main family benefits were not even indexed to inflation. The authors find that the measures had no significant impact on poverty and income distribution. However, in total they increased the disposable income of almost all groups of the population.