How does a fisacl reform affect elasticities of income tax revenues? the case os Spain, 2003-2008

Diego Martínez

No 10.13, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: This paper estimates the extent to which an exogenous change in income affects income tax revenues. We focus on the case of Spain over the period 2003-2008, as income tax there underwent a substantial reform in 2007. Using both an analytical method and a numerical simulation, we find a significant increase in aggregate income tax elasticities from 1.4 for 2003-2003 to around 1.8 for 2007-2008. The sensitivity of results to the presence of housing tax credits, non-equiproportional variations in income, changes in income inequality and fiscal drag is also considered.

Keywords: income tax elasticity; progressivity; tax rates; tax credits (search for similar items in EconPapers)
JEL-codes: H20 H24 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2010-11
New Economics Papers: this item is included in nep-acc, nep-cmp and nep-pbe
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http://www.upo.es/serv/bib/wps/econ1013.pdf First version, 2010 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pab:wpaper:10.13

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