Flat tax reforms in the U.S.: A boon for the income poor

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dc.contributor.author Díaz-Giménez, Javier
dc.contributor.author Pijoan-Mas, J.
dc.contributor.other Centro de Estudios Monetarios y Financieros
dc.date.accessioned 2009-08-24T10:54:27Z
dc.date.available 2009-08-24T10:54:27Z
dc.date.issued 2006
dc.identifier.uri http://hdl.handle.net/10016/4972
dc.description.abstract In this article we quantify the aggregate, distributional and welfare consequences of two revenue neutral flat-tax reforms using a model economy that replicates the U.S. distributions of earnings, income and wealth in very much detail. We find that the less progressive reform brings about a 2.4 percent increase in steady-state output and a more unequal distribution of after-tax income. In contrast, the more progressive reform brings about a -2.6 percent reduction in steady-state output and a distribution of aftertax income that is more egalitarian. We also find that in the less progressive flat-tax economy aggregate welfare falls by -0.17 percent of consumption, and in the more progressive flat-tax economy it increases by 0.45 percent of consumption. In both flattax reforms the income poor pay less income taxes and obtain sizeable welfare gains.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries Working paper
dc.relation.ispartofseries 0611
dc.subject.other Flat-tax reforms
dc.subject.other efficiency
dc.subject.other inequality
dc.subject.other earnings distribution
dc.subject.other income distributions
dc.subject.other wealth distribution
dc.title Flat tax reforms in the U.S.: A boon for the income poor
dc.type workingPaper
dc.subject.eciencia Economía
dc.rights.accessRights openAccess
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