Assessing income tax perturbations

Vidar Christiansen (), Zhiyang Jia and Thor Thoresen

Discussion Papers from Statistics Norway, Research Department

Abstract: We present a scheme for analysing income tax perturbations, applied to a real Norwegian tax reform during 2016 - 2018. The framework decomposes the reform into a structural reform part and a tax level effect. The former consists of a distributional impact and a social e¢ ciency effect measured as the behavioural-induced change in tax revenue. Considering the overall welfare e¤ect conditional on inequality aversion, we back out the pivotal value of the decision makers’ inequality aversion, according to which unfavourable redistributional e¤ects exactly cancel out a social efficiency enhancement.

Keywords: income tax; tax reform; tax perturbation; inequality aversion (search for similar items in EconPapers)
JEL-codes: H2 H21 H24 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2020-12
New Economics Papers: this item is included in nep-pbe and nep-pub
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Related works:
Journal Article: Assessing income tax perturbations (2022)
Working Paper: Assessing Income Tax Perturbations (2018)
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