Assessing income tax perturbations

Vidar Christiansen (), Zhiyang Jia and Thor Thoresen
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Vidar Christiansen: University of Oslo

International Tax and Public Finance, 2022, vol. 29, issue 2, No 8, 472-504

Abstract: Abstract We present a scheme for analysing income tax perturbations, applied to a real Norwegian tax reform during 2016–2018. The framework decomposes the reform into a structural reform part and a tax level effect. The former consists of a distributional impact and a social efficiency effect measured as the behavioural-induced change in tax revenue. Considering the overall welfare effect conditional on inequality aversion, we back out the pivotal value of the decision makers’ inequality aversion, according to which unfavourable redistributional effects exactly cancel out a social efficiency enhancement.

Keywords: Income tax; Tax reform; Tax perturbation; Inequality aversion (search for similar items in EconPapers)
JEL-codes: H2 H21 H24 (search for similar items in EconPapers)
Date: 2022
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Related works:
Working Paper: Assessing income tax perturbations (2020)
Working Paper: Assessing Income Tax Perturbations (2018)
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DOI: 10.1007/s10797-021-09673-2

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