Stabilization and Tax Revenue

Jonas Agell, Peter Englund and Jan Södersten
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Peter Englund: Uppsala University
Jan Södersten: Uppsala University

Chapter 6 in Incentives and Redistribution in the Welfare State, 1998, pp 140-161 from Palgrave Macmillan

Abstract: Abstract In previous chapters, we discussed behavioural responses to TR91. In this chapter and the two following ones, we will broaden our view and discuss what TR91 has accomplished in terms of the ultimate goals of economic policy. Ever since the classic treatise by Richard Musgrave The Theory of Public Finance (1959), it has been common to classify these objectives under the headings of stabilisation, distribution and allocational efficiency, a pedagogical taxonomy to which we ascribe. In this chapter, we present our analysis of the short-term effects of TR91 on the activity level. We also examine to what extent TR91 has contributed to the disastrous decline in government tax revenue in the early 1990s. In the next chapter, we will analyze distributional aspects. Did TR91 attain its goal of not creating new gaps in society? Finally, Chapter 8 discusses how TR91 measures up to the promise that it would give a substantial boost to economic efficiency.

Keywords: Disposable Income; Aggregate Demand; Financial Saving; Contractionary Effect; Housing Investment (search for similar items in EconPapers)
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-333-99485-6_6

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DOI: 10.1007/978-0-333-99485-6_6

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