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Developing a static microsimulation model for the analysis of housing taxation in Italy

Author

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  • Simone Pellegrino

    (University of Torino, School of Economics, Department of Economics and Public Finance G. Prato, Corso Unione Sovietica 218 bis, 10134 Torino (TO), Italy)

  • Massimiliano Piacenza

    (University of Torino, School of Economics, Department of Economics and Public Finance G. Prato;)

  • Gilberto Turati

    (University of Torino, School of Economics, Department of Economics and Public Finance G. Prato,)

Abstract

In this paper we develop the first (static) microsimulation model aimed at studying the distributive impact of housing taxation on Italian households. We use as input data those provided by the Bank of Italy from its Survey on Households Income and Wealth, and discuss specific problems arising in the evaluation of cadastral income and of the Property Tax base. Our estimates of the distribution of taxpayers are very close to the Ministry of Finance official statistics; hence, our model can be seen as a reliable tool to evaluate the current distribution of housing taxation and the impact of potential tax reforms. Our simulations suggest that both Property Tax and Waste Management Tax show a moderate regressive impact with respect to household gross income, whilst the Personal Income Tax on dwellings other than the main residence is progressive. We then provide an application of our model, to study the Property Tax reform in 2008. Our findings show that all households owning the main residence gain from the 2008 reform, but tax cuts are mostly concentrated on the top three deciles of household equivalent gross income, so that the richest benefit most.

Suggested Citation

  • Simone Pellegrino & Massimiliano Piacenza & Gilberto Turati, 2011. "Developing a static microsimulation model for the analysis of housing taxation in Italy," International Journal of Microsimulation, International Microsimulation Association, vol. 4(2), pages 73-85.
    • Handle: RePEc:ijm:journl:v:4:y:2011:i:2:p:73-85
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    File URL: http://ima.natsem.canberra.edu.au/IJM/V4_2/Volume%204%20Issue%202/6_IJM_58_Pellegrino_Piacenza_Turati_revised3_be.pdf
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    References listed on IDEAS

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    1. Andrea Brandolini, 1999. "The Distribution of Personal Income in Post-War Italy: Source Description, Data Quality, and the Time Pattern of Income Inequality," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 58(2), pages 183-239, September.
    2. Simone Pellegrino, 2007. "L?ici: una valutazione a un decennio dalla sua introduzione," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2007(5-6), pages 143-170.
    3. Manuela Coromaldi & Delia Guerrera, "undated". "Modello di Microsimulazione EconLav: la costruzione del data-set di input," Working Papers wp2009-4, Department of the Treasury, Ministry of the Economy and of Finance.
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    1. Morini, Matteo & Pellegrino, Simone, 2018. "Personal income tax reforms: A genetic algorithm approach," European Journal of Operational Research, Elsevier, vol. 264(3), pages 994-1004.
    2. Simone Pellegrino & Massimiliano Piacenza & Gilberto Turati, 2011. "Assessing the Distributional Effects of Housing Taxation in Italy: From the Actual Tax Code to Imputed Rent," CESifo Working Paper Series 3368, CESifo.
    3. Bimonte, Salvatore & Stabile, Arsenio, 2015. "Local taxation and urban development. Testing for the side-effects of the Italian property tax," Ecological Economics, Elsevier, vol. 120(C), pages 100-107.

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    Keywords

    Housing taxation; Microsimulation Models;

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