The Distributional Effects of the 2015-16 Tax Reform
A key objective of the Austrian income tax reform to be implemented in 2015-16 lies in substantially lowering the tax burden of wage and income tax payers. Hence, a question of central importance is how the tax reform will affect the net individual and household incomes and which distributional and...| Link(s) zu Dokument(en): | WIFO Publikation |
|---|---|
| Veröffentlicht in: | WIFO Bulletin |
| 1. Verfasser: | |
| Format: | article |
| Sprache: | Englisch |
| Veröffentlicht: |
2015
|
| Schlagworte: |
| Zusammenfassung: | A key objective of the Austrian income tax reform to be implemented in 2015-16 lies in substantially lowering the tax burden of wage and income tax payers. Hence, a question of central importance is how the tax reform will affect the net individual and household incomes and which distributional and tax revenue effects are to be expected from the reform. Using microsimulation techniques, the effects caused by the changes in the wage and income tax regime as well as in the social security contributions are quantified for 2016. The results show that the reform leads to an increase of 3.1 percent in average disposable household income. The net income gain in absolute and percentage terms increases with the pre-reform net income. This holds true for earned and pension incomes as well as for household income. As a consequence, income inequality increases slightly. Households with and without children are equally affected by the reform. The simulated loss of fiscal revenue amounts to € 4.9 billion. More than half of this shortfall (56 percent) arises due to lower revenues from households in the top third of the distribution of net household incomes while around 12 percent is attributable to the bottom third. |
|---|