IS A TAX CUT ON CULTURAL GOODS CONSUMPTION ACTUALLY DESIRABLE?:A MICROSIMULATION ANALYSIS

Juan Prieto-Rodriguez (), Desiderio Romero-Jordan () and Jose Felix Sanz-Sanz
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Jose Felix Sanz-Sanz: IEF & Universidad Complutense de Madrid

Public Economics from EconWPA

Abstract: Proposals for tax cuts on cultural goods represent an ongoing debate in cultural policy. The main aim of this paper is to shed some light on this debate using microsimulation tools. First, we have estimated an Almost Ideal Demand System for nineteen different groups of goods, including cultural goods. Expenditure and price elasticities have been obtained from this model. Using this information, three alternatives cuts in the V.A.T. rate on cultural goods have been microsimulated and evaluated in terms of revenue and welfare. These types of fiscal reforms will lead to welfare and efficiency gains that can be described as regressive.

Keywords: Microsimulation; tax reforms; cultural consumption; welfare (search for similar items in EconPapers)
JEL-codes: D12 Z10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp, nep-cul, nep-mic and nep-pub
Date: 2004-02-05, Revised 2004-02-06
Note: Type of Document - pdf; prepared on WinXP; pages: 23
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:0402001

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