Evaluating the Economic Effects of Flat Tax Reforms Using Synthetic Control Methods

Bibek Adhikari and James Alm ()

No 1615, Working Papers from Tulane University, Department of Economics

Abstract: Tax reforms are often motivated by their potential to improve economic performance. However, their actual impacts are difficult to quantify. We analyze the impact of flat tax reform on incomes using "synthetic control" methods. We identify the 8 Eastern and Central European countries that adopted flat tax systems between 1994 and 2005, and then compare post-reform GDP per capita of "treated" countries with a convex combination of similar but "untreated" countries, while accounting for the time-varying impact of unobservable heterogeneity. We find positive impacts in all 8 countries, with 7 out of 8 cases significant at the conventional level.

Keywords: Flat tax; tax reform; synthetic control methods. (search for similar items in EconPapers)
JEL-codes: H20 H25 H31 (search for similar items in EconPapers)
Date: 2016-12
New Economics Papers: this item is included in nep-pbe, nep-pub and nep-tra
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Citations: View citations in EconPapers (54)

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http://repec.tulane.edu/RePEc/pdf/tul1615.pdf First Version, December 2016 (application/pdf)

Related works:
Working Paper: Evaluating the Economic Effects of Flat Tax Reforms Using Synthetic Control Methods (2017)
Journal Article: Evaluating the Economic Effects of Flat Tax Reforms Using Synthetic Control Methods (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:tul:wpaper:1615

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