Taxation and welfare: measuring the effect of Bulgaria’s 2007-08 corporate-personal income tax reforms

Artikel

This paper utilizes a simple general-equilibrium model to analyse the long-run effects of Bulgaria’s 2007-08 corporate-personal income tax reforms. In particular, we consider the effect working through the firm’s capital structure, and argue that the new reforms incentivize firms to increase investment, as the new regime benefits retained earnings. The increase in capital increases output and productivity, which in turn increases consumption and welfare. On average, households are enjoying 8.65% higher consumption in the new steady-state in the benchmark scenario. As a robustness check, we allow for a variable labor supply, where the gain increases further by additional 3.9% of consumption, to produce an overall gain of 13.55%.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Theoretical and Practical Research in Economic Fields ; ISSN: 2068-7710 ; Year: 2019 ; Issue: forthcoming ; Craiova: ASERS

Classification and Topics

• Classification: Wirtschaft ; Business Taxes and Subsidies including sales and value-added (VAT) ; Fiscal Policies and Behavior of Economic Agents: Firm ; One, Two, and Multisector Growth Models ; Economywide Country Studies: Europe
• Subject: general equilibrium ; tax reform ; firm's capital structure ; welfare gain

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Vasilev, Aleksandar
• Event: Veröffentlichung
• (who): ASERS ; ZBW – Leibniz Information Centre for Economics
• (where): Craiova
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/209683
• Last update: 10.03.2025, 11:42 AM CET