This aims to provide a perspective on the ideal tax system, using insights from optimal-tax theory supplemented with empirical evidence. These insights are applied to actual policy questions regarding the progressiveness of the labor-income tax, in-work tax credits, the design of the...

The German 2008 corporate tax reform followed the distinct and internationally prevalent pattern of tax-rate cut cum base broadening. Based on a new corporate microsimulation model, ZEW TaxCoMM, we assess the heterogeneous effects of the tax reform on firms, varying according to some of the...

Although much academic and policy discussion has focused on replacing the income tax with a consumption-based tax, very few consumption-based direct tax reforms have been enacted. Much more common are approaches that reduce the level of capital-income taxation under an income tax, including the...

This paper provides an assessment of the revenue consequences that would result from implementation of a common consolidated corporate tax base (CCCTB). We find that the total tax revenue of the EU member states is reduced by 4.56% under a compulsory CCCTB and by 4.65% under an optional CCCTB....

Some noncompliant taxpayers fall outside the reach of third-party withholding and reporting. Revenue agencies may use enforcement and/or prosocial strategies to encourage compliance among such taxpayers. Revenue agencies should stand ready to use narrative as part of these efforts, despite...

We examine the effects of taxation on financing policy using the corporate tax reform in 2001 in Croatia as a quasi-natural experiment. Since the extant literature on tax effects on capital structure studies listed firms in developed countries, it is worth investigating whether the same results...

Common public-finance models suggest that tax competition between welfare states leads to a zero-taxation outcome in the absence of migration costs or other barriers to migration. This paper develops a two-region framework with mobile altruistic taxpayers and immobile welfare recipients. Tax...

We provide an empirical evaluation of the effects of a cut in social security contributions (i) for all types of labor and (ii) only for unskilled labor, within a computable generalequilibrium model simulation of the Spanish economy. The model allows firms to follow a noncompetitive price rule,...

Although consumption-based direct taxation has long been advocated in academic and policy circles, very few countries have actually implemented such taxes.This article provides an overview of alternative approaches to direct consumption taxation and examines arguments favoring consumption taxes...

This paper examines the growth effects of an increase of capital income taxes if the additional revenue is devoted to cutting wage-related social security contributions to reduce unemployment. The analysis is carried out in an overlapping-generations model with endogenous growth, unemployment,...