IDEAS home Printed from https://ideas.repec.org/p/gea/wpaper/9-2012.html
   My bibliography  Save this paper

The tax shift from labor to consumption in Italy: a fiscal microsimulation analysis using EUROMOD

Author

Listed:
  • Andrea Taddei

    (University of Genoa, Italy)

Abstract

The aim of this paper is to simulate a tax shift reform from labor to consumption in Italy and observe the distributional impact of this policy on households. The microsimulation model used is EUROMOD, which is uniquely focused on direct taxes, social contributions and benefits. Through a two steps matching between the Italian income survey (IT-SILC) and the Households Budget Survey (Indagine sui consumi delle famiglie italiane – ISTAT), the model was enriched with data on consumption and it has been possible to simulate also indirect taxes (VAT and excises). Once calculated the baseline, the reform has been simulated by a decrease in social security contributions paid by employees, compensated with a rise in standard VAT in order to obtain Government budget neutrality. The main finding is that the simulated reform increase the regressive of the system without changes in the redistribution strategies or with a more progressive income taxation. To obtain a measure of the change in households wealth, has been used the Welfare Gain index which considered both consumption and income changes. The results are also shown at regional level.

Suggested Citation

  • Andrea Taddei, 2012. "The tax shift from labor to consumption in Italy: a fiscal microsimulation analysis using EUROMOD," DEP - series of economic working papers 9/2012, University of Genoa, Research Doctorate in Public Economics.
    • Handle: RePEc:gea:wpaper:9/2012
    as

    Download full text from publisher

    File URL: http://www.dep.unige.it/RePEc/gea/wpaper/dwpo-9-dec2012.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. François Bourguignon & Amedeo Spadaro, 2006. "Microsimulation as a tool for evaluating redistribution policies," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(1), pages 77-106, April.
    2. Günter Coenen & Peter McAdam, 2006. "How do VAT changes affect the economy? An illustration using the new area-wide model," Research Bulletin, European Central Bank, vol. 4, pages 2-5.
    3. André Decoster & Jason Loughrey & Cathal O'Donoghue & Dirk Verwerft, 2011. "Microsimulation of indirect taxes," International Journal of Microsimulation, International Microsimulation Association, vol. 4(2), pages 41-56.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. M Luisa Maitino & Letizia Ravagli & Nicola Sciclone, 2017. "Microreg: A Traditional Tax-Benefit Microsimulation Model Extended To Indirect Taxes And In Kind Transfers," International Journal of Microsimulation, International Microsimulation Association, vol. 10(1), pages 5-38.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Olivier Bargain, 2017. "Welfare analysis and redistributive policies," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(4), pages 393-419, December.
    2. Figari, Francesco & Paulus, Alari & Sutherland, Holly, 2014. "Microsimulation and policy analysis," ISER Working Paper Series 2014-23, Institute for Social and Economic Research.
    3. Robert Darko Osei & Kwabena Adu-Ababio, 2018. "Effects of an education reform on household poverty and inequality: A microsimulation analysis on the free Senior High School policy in Ghana," WIDER Working Paper Series 147, World Institute for Development Economic Research (UNU-WIDER).
    4. Brum, Matias & De Rosa, Mauricio, 2021. "Too little but not too late: nowcasting poverty and cash transfers’ incidence during COVID-19’s crisis," World Development, Elsevier, vol. 140(C).
    5. Bucciol, Alessandro & Cavalli, Laura & Fedotenkov, Igor & Pertile, Paolo & Polin, Veronica & Sartor, Nicola & Sommacal, Alessandro, 2017. "A large scale OLG model for the analysis of the redistributive effects of policy reforms," European Journal of Political Economy, Elsevier, vol. 48(C), pages 104-127.
    6. Dolls, Mathias & Fuest, Clemens & Peichl, Andreas, 2012. "Automatic stabilizers and economic crisis: US vs. Europe," Journal of Public Economics, Elsevier, vol. 96(3), pages 279-294.
    7. Kalle Hirvonen & Giulia Mascagni & Keetie Roelen, 2018. "Linking taxation and social protection: Evidence on redistribution and poverty reduction in Ethiopia," International Social Security Review, John Wiley & Sons, vol. 71(1), pages 3-24, January.
    8. Dorothée Boccanfuso & Luc Savard, 2005. "Impact Analysis of the Liberalization of Groundnut Production in Senegal: A Multi-household Computable General Equilibrium Model," Cahiers de recherche 05-12, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    9. Åsa Johansson, 2016. "Public Finance, Economic Growth and Inequality: A Survey of the Evidence," OECD Economics Department Working Papers 1346, OECD Publishing.
    10. Chadha, Jagjit S., 2022. "Foreward: bridge to normality," National Institute UK Economic Outlook, National Institute of Economic and Social Research, vol. 0(1 Winter), pages 1-3.
    11. Michal Horvath & Matus Senaj & Zuzana Siebertova & Norbert Svarda, 2015. "The End of the Flat Tax Experiment in Slovakia," Discussion Papers 15/12, Department of Economics, University of York.
    12. Matías Brum & Mauricio de Rosa, 2020. "Too little but not too late. Nowcasting poverty and cash transfers' incidence in Uruguay during COVID-19's crisis," Documentos de Trabajo (working papers) 20-09, Instituto de Economía - IECON.
    13. Figari, Francesco & Colombino, Ugo & Coda Moscarola, Flavia & Locatelli, Marilena, 2014. "Shifting taxes from labour to property. A simulation under labour market equilibrium," EUROMOD Working Papers EM20/14, EUROMOD at the Institute for Social and Economic Research.
    14. Andreas Peichl, 2009. "The Benefits and Problems of Linking Micro and Macro Models — Evidence from a Flat Tax Analysis," Journal of Applied Economics, Taylor & Francis Journals, vol. 12(2), pages 301-329, November.
    15. O'Donoghue, Cathal & Colombino, Ugo & Narazani, Edlira & Locatelli, Marilena & Shima, Isilda, 2008. "Behavioural and welfare effects of basic income policies: a simulation for European countries," EUROMOD Working Papers EM5/08, EUROMOD at the Institute for Social and Economic Research.
    16. Dorothée Boccanfuso & Massa Coulibaly & Luc Savard & Govinda Timilsina, 2018. "Macroeconomic and Distributional Impacts of Jatropha Based Biodiesel in Mali," Economies, MDPI, vol. 6(4), pages 1-22, November.
    17. Kennedy, Jack, 2021. "Box C: Wage pressures: a perspective from online job advertisements," National Institute UK Economic Outlook, National Institute of Economic and Social Research, vol. 0(4), pages 17-18.
    18. Laura Cavalli & Alessandro Bucciol & Paolo Pertile & Veronica Polin & Nicola Sartor & Alessandro Sommacal, 2012. "Modelling life-course decisions for the analysis of interpersonal and intrapersonal redistribution," Working Papers 25/2012, University of Verona, Department of Economics.
    19. André Decoster & Sergio Perelman & Dieter Vandelannoote & Toon Vanheukelom & Gerlinde Verbist, 2015. "A bird’s eye view on 20 years of tax-benefit reforms in Belgium," Working Papers of Department of Economics, Leuven 494657, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    20. Carlos Foronda Rojas, 2006. "Evaluación de los efectos de las políticas de exportación y de productividad en la distribución del ingreso a partir de microsimulaciones," Investigación & Desarrollo, Universidad Privada Boliviana, vol. 1(1), pages 41-60.

    More about this item

    Keywords

    direct and indirect taxation; fiscal microsimulation; progressivity; tax reform; redistribution;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gea:wpaper:9/2012. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marcello Montefiori (email available below). General contact details of provider: https://edirc.repec.org/data/ifgenit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.