Income Tax Reform in France: A Case Study

Helmuth Cremer, Firouz Gahvari and Norbert Ladoux ()

FinanzArchiv: Public Finance Analysis, 2010, vol. 66, issue 2, 121-133

Abstract: This paper calibrates the graduated income tax system currently in place in France while assuming that the number of earning-ability types in the economy is four. It also computes the optimal linear and nonlinear income tax schedules for this economy. Its main finding is that while an optimal linear income tax is (in most scenarios) welfare-superior to the current tax system, the welfare gain may be small. On the other hand, an optimal general income tax leads to substantial welfare gains over the present system.

Keywords: Flat Tax; General Income Tax; Welfare Gains (search for similar items in EconPapers)
JEL-codes: H21 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (3)

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DOI: 10.1628/001522108X524179

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