Fiscal Drag in Europe: Key Facts

Mathias Dolls, Esteban Garcia-Miralles, Max Lay and Andreas Peichl

No 82, EconPol Policy Brief from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: Key MessagesIn 21 EU countries, tax-to-base (TTB) elasticities mostly range from 1.7 to 2: tax burdens tend to respond similarly to nominal income growtTTB elasticities tend to be highest for labor income, followed by capital income and pensions and benefitsFiscal drag reduces the progressivity of the tax system, with lower-earnings groups facing higher TTB elasticitiesIn 2019–23, about one-third of the countries analyzed only partially offset fiscal dragIn these countries, tax revenue in 2023 was higher than in a scenario with full indexation

Date: 2026
New Economics Papers: this item is included in nep-eec
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ifo.de/DocDL/EconPol_PolicyBrief_82_0.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:econpb:_82

Access Statistics for this paper

More papers in EconPol Policy Brief from ifo Institute - Leibniz Institute for Economic Research at the University of Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().