for their valuable help. We would also like to thank participants of the ECB Fiscal Workshop on "Challenges for government revenues", especially Ludger Schuknecht, for their useful comments. All remaining errors are ours. The views expressed are those of the authors and not necessarily of the institutions they represent.
This paper provides estimates of tax revenues with respect to their individual tax bases, focusing on differences between long-and short-run elasticities and allowing for asymmetries in the speed of adjustment as well as in short-run volatility. Estimates are presented for two major tax categories in Poland: value added tax, and employer and employee social contributions for the 1999-2013 period. Our results indicate that long-run elasticities are close to unity. An analysis of short-run elasticities based on considering their asymmetric responses to economic fluctuations, complemented by a rolling regression exercise, suggests that VAT revenues are subject to greater volatility. Therefore, a shift in taxation from labor income to consumption increases the sensitivity of public finances to the business cycle.
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