Discussion Papers no. 945

Assessing income tax perturbations

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We present a scheme for analysing income tax perturbations, applied to a real Norwegian tax reform during 2016 - 2018

The framework decomposes the reform into a structural reform part and a tax level effect. The former consists of a distributional impact and a social e¢ ciency effect measured as the behavioural-induced change in tax revenue. Considering the overall welfare e¤ect conditional on inequality aversion, we back out the pivotal value of the decision makers’ inequality aversion, according to which unfavourable redistributional e¤ects exactly cancel out a social efficiency enhancement.

About the publication

Title

Assessing income tax perturbations

Author

Vidar Christiansen, Zhiyang Jia, and Thor O. Thoresen

Series and number

Discussion Papers no. 945

Publisher

Statistisk sentralbyrå

Topic

Discussion Papers

ISSN

1892-753X

Number of pages

31

About Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.

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