Effects of the Austrian Income Tax Reform 2015/2016 on Private Consumption: Survey Findings

Ralf Kronberger () and Christoph Schmid ()
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Ralf Kronberger: Austrian Federal Economic Chamber, Financial, Fiscal and Trade Policy Department
Christoph Schmid: Austrian Federal Economic Chamber, Financial, Fiscal and Trade Policy Department

Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics

Abstract: We use survey findings to analyse the effects of the Austrian income tax reform 2015/2016 on private consumption differentiated by income classes. Using survey data, we also estimate the corresponding average marginal propensities to consume and compare them to applied average marginal propensities to consume in economic models used to analyse the previous two income tax reforms in Austria. The estimated average marginal propensity to consume amounts to approximately 0.46, whereby in tendency increasing from the lowest income class (0.42-0.43) to the highest income class (0.48-0.50). Our estimated average marginal propensity to consume across all income classes basically corresponds to those used in economic models to evaluate the income tax reform 2015/2016. However, our estimated marginal propensities to consume by income classes fundamentally differ from those used in the economic models.

Keywords: income tax reform; private consumption response; marginal propensity to consume; survey methodology (search for similar items in EconPapers)
JEL-codes: E62 H24 H31 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-mac, nep-ore and nep-pbe
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