The purpose of this paper is to present an exercise where we identify optimal income tax rules according to various social welfare criteria, keeping fixed the total net tax revenue. To this end, we estimate a microeconomic model with 78 parameters that capture heterogeneity in consumptionleisure preferences for singles and couples as well as in job opportunities across individuals based on deta...

The theoretical literature suggests that taxation can have a large impact on household portfolio selection and allocation. In this paper we analyze the tax treatment of life insurance, considering the cancellation of tax incentives in Italian life insurance contracts for investors with high marginal tax rates and the introduction of incentives for those with low rates. Using repeated cross-sect...

Ghana’s tax reforms constitute the major policy instrument needed to accelerate growth and poverty reduction. Over the past two decades, the government has consistently spent more revenue than it is able to generate and the gap is often financed with foreign aid which has perpetuated the country’s aid dependency. Two options can be explored to reduce the gap between government revenue and expen...

In this paper, we study the impact of tax policy on wage negotiations, workers' effort, and employment when effort is only imperfectly observable. We show that the different wage-setting motives – rent sharing and effort incentives – reinforce the effects of partial tax policy measures but not necessarily those of more fundamental tax reforms. We show that a higher degree of tax progression alw...

Tax competition in the European Union is fierce. Especially since the entry of the new member States, tax reforms in the ”old” Europe are frequent. In this paper we formally test the presence of strategic tax setting in the old EU14 as a reaction to the tax rates in the new member states using a fiscal reaction function. We first develop a simple model of spatial tax competition that predicts a...

In 2015 the British government announced a number of major tax reforms for individual landlords. To give landlords time to adjust, some of these tax measures are being introduced gradually from April 2017, with full effect in tax year 2020/21. The changes in taxation have received much media attention since there has been widespread belief that the new measures were sufficiently skewed against ...