Who Really Benefits from Consumption Tax Cuts? Evidence from a Large VAT Reform in France. / Youssef Benzarti, Dorian Carloni.

Format:

Book

Author/Creator:

Benzarti, Youssef.

Contributor:

National Bureau of Economic Research.

Carloni, Dorian.

Series:

Working Paper Series (National Bureau of Economic Research) no. w23848.

NBER working paper series no. w23848

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2017.

Summary:

In this paper we evaluate the incidence of a large cut in value-added taxes (VAT) for French sit-down restaurants. In contrast to previous studies that focus on prices only, we estimate its effect on four groups: workers, firm owners, consumers and suppliers of material goods. Using a difference-in-differences strategy on firm-level data we find that: (1) the effect on consumers was limited, (2) employees and sellers of material goods shared 25 and 16 percent of the total benefit, and (3) the reform mostly benefited owners of sit-down restaurants, who pocketed 41 percent of the tax cut.

Notes:

Print version record

September 2017.