Microsimulation Tools for the Evaluation of Fiscal Policy Reforms at the Banco De Espaaa

Bover, Olympia; Casado, José María; García-Miralles, Esteban; Azcona, José María Labeaga; Magdaleno, Roberto Ramos

doi:10.2139/ssrn.3048727

Cited by 31 publications

(14 citation statements)

References 25 publications

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“…marginal tax rates are higher than the averages ones. For this tax function, the marginal tax rate is given by m l (I l ) = ∂T (I l ) Bover et al (2017). In the model, income tax liabilities are the result of adding up the taxes on labor and capital, and subtracting the tax credits.…”

Section: The Tax Reformsmentioning

confidence: 99%

Reforming the Individual Income Tax in Spain

2021

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We study how much revenue can be generated by more progressive personal income taxes in Spain. We build a life-cycle economy with uninsurable labor productivity risk and endogenous labor supply. Individuals face progressive taxes on labor and capital incomes and proportional taxes that capture social security, corporate income, and consumption taxes. An increase (decrease) in labor income taxes for individuals who earn more (less) than the mean labor income generates a small additional revenue. The revenue from labor income taxes is maximized at an e ective marginal tax rate of 51.6% (38.9%) for the richest 1% (5%) of individuals, versus 46.3% (34.7%) in the benchmark economy. The additional revenue from labor income taxes is only 0.82% higher, while the total tax revenue declines by 1.55%. The total tax revenue is higher if marginal taxes are raised only for the top earners. The increase, however, must be substantial and cover a large segment of top earners. The new tax collection from a 3 percentage points increase on the top 1% is just 0.09%. A 10 percentage points increase on the top 10% of earners (those who earn more than e41,699) raises the total taxes by 2.81%.

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Section: The Tax Reformsmentioning

confidence: 99%

Reforming the Individual Income Tax in Spain

2021

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“…The redistributive nature of a tax system may be determined by differences in the parameters of other taxes in addition to income tax. However, the redistributive effects of indirect taxation in Spain (essentially value added tax and excise duties) are low because progressivity is limited (see Bover et al 2017). This is not exclusive to the Spanish tax system and is because indirect taxation rates are essentially proportional and do not vary according to income.…”

Section: Household Incomementioning

confidence: 99%

Income, consumption and wealth inequality in Spain

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Bover

Casado

et al. 2018

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This paper analyses the level of inequality in Spain and how it evolved over the course of the past crisis and the early stages of the current recovery. To this end, it first introduces the various dimensions of wage, income, consumption and wealth inequality, and studies how they have developed. The analysis shows less wage dispersion in Spain than in other comparable economies, even after the crisis years, while the surge in unemployment during the period resulted in a high level of inequality in per capita income. The level of inequality in Spain is more moderate when total gross household income is analysed, decreasing during the crisis as a result of pensions developing more favourably than other sources of income, in conjunction with young people delaying setting up home. Inequality in per capita consumption rose during the crisis, particularly as a result of a decrease in expenditure on consumer durables by low-income households. Wealth inequality exceeds income inequality and increased during the downturn as a result of financial assets outperforming real assets. Nevertheless, Spain's wealth inequality is moderate by international standards, as ownership of real assets is more widespread than in other countries. The way inequality has evolved during the early stages of the current economic recovery shows that falling unemployment has enabled a reduction in wage income inequality, as well as in per capita income inequality, albeit to a lesser extent. We are indebted to all seminar participants at the Banco de España in particular to Óscar Arce and Pablo Hernández de Cos. We are very grateful to Virginia Sánchez Marcos and Manuel Bagues for their work in improving the paper during the editorial process. We also thank the assistance of Sandra Laza, Ana Valentina Regil, Maria Beiro and the translation and editing unit at the Banco de España. The opinions and analyses are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Banco de España or the Eurosystem.

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“…Meanwhile, Bover et al (2017) present results based on 2015 household expenditure data for Spain as a percentage of both disposable income and expenditure, finding regressive and broadly proportional patterns, respectively. They prefer the expenditure-based approach on the grounds that expenditure rather than income is the legal base of the tax.…”

Section: Previous Studiesmentioning

confidence: 75%

OECD Taxation Working Papers

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OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s). Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the OECD works. Comments on Working Papers are welcomed, and may be sent to the Centre for Tax Policy and Administration, OECD,

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Microsimulation Tools for the Evaluation of Fiscal Policy Reforms at the Banco De Espaaa

Cited by 31 publications

References 25 publications

Reforming the Individual Income Tax in Spain

Reforming the Individual Income Tax in Spain

Income, consumption and wealth inequality in Spain

OECD Taxation Working Papers

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