Comparative fiscal illusion: a fiscal illusion index for the European Union

Roberto Dell’Anno () and Brian Dollery ()
Authors registered in the RePEc Author Service: Roberto Dell'Anno

Empirical Economics, 2014, vol. 46, issue 3, 937-960

Abstract: This paper provides an empirical analysis of fiscal illusion by estimating an index of fiscal illusion for 28 European countries over the period 1995–2008 employing a structural equation approach. Using Multiple Indicators Multiple Causes models, the paper investigates the main indicators of fiscal illusion and develops an index of fiscal illusion. It concludes that the chief determinants for the deployment of fiscal illusion strategies are the share of self-employment on total employment, the educational level of citizens, and the size of tax burden. At the same time, policy makers attempt to ‘conceal’ the real tax burden by means of debt illusion, fiscal drag, wage withholding taxes, as well as taxes on labour. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Fiscal illusion; Financial illusion; MIMIC model; European countries; H3; H8; 052 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00181-013-0701-x (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Comparative fiscal illusion: A fiscal illusion index for the European Union (2012)
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:spr:empeco:v:46:y:2014:i:3:p:937-960

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-013-0701-x

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().