This paper assesses the effects of the changes of the Value Added Tax (VAT) rates in Italy for the period 1988-1997, questioning their overall redistributive impact compared with an equal-revenue proportional tax rate. By using the theory of marginal tax reforms and the AWARETAX microsimulation...

This paper shows that a Value Added Tax (Vat) with multiple tax rates in Italy is not the most effective way to pursue redistributive aims. As the tax revenue of the Italian Vat is significantly affected by the use of reduced tax rates and exemptions, we suggest that a shift to a uniform Vat...