Arbeitspapier
Baltic tax reform
The paper presents an endogenous growth economy with a representation of the tax rate system in the Baltic countries. Assuming that government spending is a given fraction of output, the paper shows how a flat tax system balanced between labor and corporate tax rates can be second best optimal. It then computes how actual Baltic tax reforms from 2000 to 2007 affect the growth rate and welfare, including transition dynamics. Comparing the actual reform effects to hypothetical tax experiments, it results that equal flat tax rates on personal and corporate income would have increased welfare in all three Baltic countries by 24% more on average than the actual reforms. This shows how equal, balanced, flat rate taxes can be optimal in both theory and practice. Further, movement towards a more equal balance between labor and capital tax rates, through changing just one tax rate, achieved almost as high or higher utility gains as in actual law for all three countries under both open and closed economy cases. This shows benefits of moving towards the optimum.
- Language
-
Englisch
- Bibliographic citation
-
Series: Cardiff Economics Working Papers ; No. E2008/6
- Classification
-
Wirtschaft
General Aggregative Models: Neoclassical
Taxation, Subsidies, and Revenue: General
Macroeconomic Analyses of Economic Development
Industrialization; Manufacturing and Service Industries; Choice of Technology
- Subject
-
tax reforms
endogenous growth
transitional dynamics
flat taxes
Steuerreform
Flat Tax
Neue Wachstumstheorie
Übergangswirtschaft
Nordosteuropa
- Event
-
Geistige Schöpfung
- (who)
-
Āzacis, Helmuts
Gillman, Max
- Event
-
Veröffentlichung
- (who)
-
Cardiff University, Cardiff Business School
- (where)
-
Cardiff
- (when)
-
2008
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Āzacis, Helmuts
- Gillman, Max
- Cardiff University, Cardiff Business School
Time of origin
- 2008
Other Objects (12)
Predicting tax reform
Employee Benefits and Tax Reform
Ecological Tax Reform and Unemployment
Green tax reform and competitiveness
The Interaction of Tax Exemptions and Individual Tax Reform Preferences
Global Implications of U.S. Tax Reform
Tax reform, welfare and intergenerational redistribution
Environmental Tax Reform and Double Dividend
The tax reform experience of Kenya
Perspectives on tax reform in Brazil
Tax reform and employment in Europe
Fundamental Tax Reform in The Netherlands
Predicting tax reform
Employee Benefits and Tax Reform
Ecological Tax Reform and Unemployment
Green tax reform and competitiveness
The Interaction of Tax Exemptions and Individual Tax Reform Preferences
Global Implications of U.S. Tax Reform
Tax reform, welfare and intergenerational redistribution
Environmental Tax Reform and Double Dividend
The tax reform experience of Kenya
Perspectives on tax reform in Brazil
Tax reform and employment in Europe
Fundamental Tax Reform in The Netherlands
Predicting tax reform
Employee Benefits and Tax Reform
Ecological Tax Reform and Unemployment
Green tax reform and competitiveness
The Interaction of Tax Exemptions and Individual Tax Reform Preferences
Global Implications of U.S. Tax Reform
Tax reform, welfare and intergenerational redistribution
Environmental Tax Reform and Double Dividend
The tax reform experience of Kenya
Perspectives on tax reform in Brazil
Tax reform and employment in Europe