Discussion Papers no. 171

Empirical evidence from Italy, Norway and Sweden

Welfare effects of proportional taxation

This paper employs a particular labor supply model to examine the welfare effects from replacing current tax systems in Italy, Norway and Sweden by proportional taxation on labor income. The results show that there are high efficiency costs for Norway and low costs for Italy and Sweden associated with the current progressive labor income taxes. However, there appears to be large variation in the distribution of welfare gains/losses. "Rich" households – defined by their pre-tax-reform income – tend to benefit more than "poor" households from replacing the current progressive tax systems by proportional taxation.

Om publikasjonen

Tittel

Welfare effects of proportional taxation. Empirical evidence from Italy, Norway and Sweden

Ansvarlige

Rolf Aaberge, Ugo Colombino, Steinar Strøm

Serie og -nummer

Discussion Papers no. 171

Utgiver

Statistics Norway, Research department

Emne

Discussion Papers

Antall sider

25

Målform

Engelsk

Om Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.

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