Macroeconomic Effects of Tax Rate and Base Changes: Evidence from Fiscal Consolidations / Era Dabla-Norris, Frederico Lima.

Format:

Book

Government document

Author/Creator:

Dabla-Norris, Era.

Contributor:

Lima, Frederico.

Series:

IMF Working Papers; Working Paper ; No. 2018/220

IMF Working Papers

Language:

English

Subjects (All):

Taxation--Rates and tables.

Taxation.

Macroeconomics.

Budget deficits.

Physical Description:

1 online resource (48 pages)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2018.

Summary:

This paper examines the macroeconomic effects of tax changes during fiscal consolidations. We build a new narrative dataset of tax changes during fiscal consolidation years, containing detailed information on the expected revenue impact, motivation, and announcement and implementation dates of nearly 2,500 tax measures across 10 OECD countries. We analyze the macroeconomic impact of tax changes, distinguishing between tax rate and tax base changes, and further separating between changes in personal income, corporate income, and value added tax. Our results suggest that base broadening during fiscal consolidations leads to smaller output and employment declines compared to rate hikes, even when distinguishing between tax types.

Contents:

Cover

Contents

1 Introduction

2 Narrative dataset

2.1 Sample and sources

2.2 Coding tax measure types

2.3 Size and timing of tax changes

2.4 Motivation

2.5 Example: The UK June 2010 Budget

2.6 Descriptive statistics

3 Empirical approach

3.1 Predictability of narrative tax changes

3.2 Impulse response functions

4 Results for all taxes combined

4.1 Dynamic effects of tax changes

4.2 Tax multipliers

4.3 Robustness checks

5 Results for specific taxes

5.1 Changes to the baseline specification

5.2 Dynamic effects of specific tax changes

6 Conclusion

A: Data

B: Other Figures and Tables.

Notes:

Includes bibliographical references.

Description based on publisher supplied metadata and other sources.

Description based on print version record.

ISBN:

9781484379035

1484379039

9781484379066

1484379063

OCLC:

1059417166