Reducing the income tax burden for households with children : an assessment of the child tax credit reform in Austria
Michael Christl, Silvia De Poli and Janos Varga
This paper analyses the impact of the implementation of a child tax credit in Austria in 2019, both on micro and macro level. First, we assess the fiscal and distributional impact of this reform using EUROMOD. Second, we estimate labour supply impacts of the reform based on a structural discrete choice framework. Third, we evaluate the macroeconomic impacts, by calibrating and shocking the DSGE model QUEST, with the micro-based results. We show that the reform reduces inequality, lowers the poverty rate for households with children. Overall the reform has a positive impact on labour supply, especially for women. On the macro-level (and in the long-run), our model suggests a small but positive impact on employment, investment, consumption and GDP. Additionally, using the macro impact of the reform, we show that accounting for those behavioural responses at the micro level is important to asses the long-run impact of tax reforms, especially on the income distribution.
Year of publication: |
February 2020
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Authors: | Christl, Michael ; De Poli, Silvia ; Varga, Janos |
Publisher: |
Colchester, Essex, UK : Institute for Social and Economic Research, University of Essex |
Subject: | EUROMOD | tax credit | reform | DSGE | labour supply | microsimulation | Steuervergünstigung | Tax incentive | Steuerreform | Tax reform | Arbeitsangebot | Labour supply | Österreich | Austria | Kinder | Children | Einkommensteuer | Income tax | Familienleistungsausgleich | Family benefits | Familienbesteuerung | Family taxation | Steuerwirkung | Tax effects | Wirkungsanalyse | Impact assessment |
Saved in:
freely available
Extent: | 1 Online-Ressource (circa 40 Seiten) Illustrationen |
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Series: | EUROMOD working paper series. - Essex : Institute for Social and Economic Research, University of Essex, ZDB-ID 2196511-0. - Vol. EM 20, 1 |
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper |
Language: | English |
Other identifiers: | hdl:10419/228400 [Handle] |
Classification: | H24 - Personal Income and Other Nonbusiness Taxes and Subsidies ; H31 - Household ; I38 - Government Policy; Provision and Effects of Welfare Programs |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012175967