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Progressive Tax Reforms in Flat Tax Countries
[journal article]
Abstract The adoption of flat tax systems in Central and Eastern European countries have often been supported by arguments of simplicity, higher compliance and lower distortionary effects. However, since income inequality is high in these countries, the question of introducing some progressivity has come to ... view more
The adoption of flat tax systems in Central and Eastern European countries have often been supported by arguments of simplicity, higher compliance and lower distortionary effects. However, since income inequality is high in these countries, the question of introducing some progressivity has come to the fore in both policy and academic circles. In this paper, we combine microsimulation and macro models to analyze the effects of moving from a flat to a progressive tax system and we find that a reduction in income inequality can be achieved with positive, albeit negligible, employment and growth impact.... view less
Keywords
tax system; tax policy; tax progression; assessment basis; difference in income; income tax; inequality; simulation; Europe
Classification
Public Finance
Free Keywords
Flat tax; microsimulation model; DSGE model; growth; European Union Statistics on Income and Living Conditions (EU-SILC) 2015
Document language
English
Publication Year
2020
Page/Pages
p. 83-107
Journal
Eastern European Economics, 58 (2020) 2
DOI
https://doi.org/10.1080/00128775.2019.1671201
ISSN
1557-9298
Status
Published Version; peer reviewed