Benefits and problems of linking micro and macro models – evidence from a flat tax analysis

Andreas Peichl

No 2009-02, ISER Working Paper Series from Institute for Social and Economic Research

Abstract: The aim of this paper is to describe the state-of-the-art in simulation and to illustrate benefits and problems of linking micro and macro models by analysing flat tax proposals for Germany. The analysis shows that a personal income flat tax can indeed overcome the fundamental equity efficiency trade-off while simultaneously increasing the tax revenue. However, this result does not hold for a flat tax combining a personal income flat tax with a corporate cash flow flat tax, even when allowing for an ex-post loss in revenue as the top of the distribution still gains the most.

Date: 2009-01-28
New Economics Papers: this item is included in nep-acc and nep-cmp
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Related works:
Journal Article: The benefits and problems of linking micro and macromodels - Evidence from a flat tax analysis (2009)
Journal Article: The Benefits and Problems of Linking Micro and Macro Models — Evidence from a Flat Tax Analysis (2009)
Working Paper: The Benefits and Problems of Linking Micro and Macro Models: Evidence from a Flat Tax Analysis (2009)
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