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The removal of tax expenditures from Spanish personal income tax: Impact on tax collection and income distribution

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  • Julio López‐Laborda
  • Carmen Marín‐González
  • Jorge Onrubia

Abstract

The paper estimates the consequences for tax revenue and income distribution of the removal of the tax expenditures from Spanish Personal Income Tax (IRPF) in place during the 2013 tax year. The paper concludes that the removal of all the tax expenditures analyzed would increase revenue by €24,457 million (37.9% of the IRPF actual collection), and that the redistributive effect, measured by the Reynolds‐Smolensky index, would be reduced by 1.1%. The paper also analyzes sundry hypothetical scenarios involving the refunding to individuals of the tax collected through the removal of tax expenditures, and its distributive impact is quantified.

Suggested Citation

  • Julio López‐Laborda & Carmen Marín‐González & Jorge Onrubia, 2022. "The removal of tax expenditures from Spanish personal income tax: Impact on tax collection and income distribution," Public Budgeting & Finance, Wiley Blackwell, vol. 42(2), pages 221-254, June.
    • Handle: RePEc:bla:pbudge:v:42:y:2022:i:2:p:221-254
    DOI: 10.1111/pbaf.12312
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    References listed on IDEAS

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    10. Jorge Onrubia & Fidel Picos-Sánchez & María Carmen Rodado, 2014. "Rethinking the Pfähler–Lambert decomposition to analyse real-world personal income taxes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(4), pages 796-812, August.
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    1. Sokolovska Alla & Zatonatska Tetiana & Rainova Larysa, 2023. "Benchmark and Tax Expenditures on Personal Income Tax in Ukraine," Economics, Sciendo, vol. 11(1), pages 159-175, June.

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