The fiscal effects of work-related tax expenditures in Europe

Salvador Barrios (), Serena Fatica, Diego Martínez and Gilles Mourre

No 545, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: Work-related tax incentives can have a significant effect on how much, if at all, certain individuals decide to work. This paper examines the fiscal impacts and associated welfare costs of reforms to such tax relief measures in five European countries, France, Spain, the United Kingdom, Hungary and Slovakia. It finds that at least a quarter of the extra tax revenue raised by lowering work-related tax incentives tends to get lost, as individuals react by working less or withdrawing altogether. The revenue gain is particularly limited following the removal of tax incentives targeting the very lowest earners, which may even lead to revenue losses in some cases. Reducing work-related tax reliefs also has significant negative welfare effects.

JEL-codes: H24 H31 J20 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2015-02
New Economics Papers: this item is included in nep-eur, nep-law and nep-pbe
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: The Fiscal Effects of Work-related Tax Expenditures in Europe (2018)
Working Paper: The fiscal effects of work-related tax expenditures in Europe (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0545

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