Who Really Benefits from Consumption Tax Cuts? Evidence from a Large VAT Reform in France

Youssef Benzarti and Dorian Carloni

No 23848, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper we evaluate the incidence of a large cut in value-added taxes (VAT) for French sit-down restaurants. In contrast to previous studies that focus on prices only, we estimate its effect on four groups: workers, firm owners, consumers and suppliers of material goods. Using a difference-in-differences strategy on firm-level data we find that: (1) the effect on consumers was limited, (2) employees and sellers of material goods shared 25 and 16 percent of the total benefit, and (3) the reform mostly benefited owners of sit-down restaurants, who pocketed 41 percent of the tax cut.

JEL-codes: H20 H22 H23 (search for similar items in EconPapers)
Date: 2017-09
New Economics Papers: this item is included in nep-acc, nep-eur and nep-pbe
Note: PE
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Citations: View citations in EconPapers (18)

Published as Youssef Benzarti & Dorian Carloni, 2019. "Who Really Benefits from Consumption Tax Cuts? Evidence from a Large VAT Reform in France," American Economic Journal: Economic Policy, vol 11(1), pages 38-63.

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Journal Article: Who Really Benefits from Consumption Tax Cuts? Evidence from a Large VAT Reform in France (2019)
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