Taxation, growth and welfare : Dynamic effects of Estonia's 2000 income tax act
Funke, Michael; Strulik, Holger (10.10.2003)
Numero
10/2003Julkaisija
Bank of Finland
2003
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-201408072205Tiivistelmä
This paper analyses the long-run effects of Estonia s 2000 Income Tax Act with a dynamic general equilibrium model.Specifically, we consider the impact of the shift from an imputation system to one where companies only pay taxes on distributed profits.Balanced growth paths, transitional dynamics and welfare costs are computed. Our results indicate that the 2000 Income Tax Act leads to higher per capita income and investment, but lower welfare.A sensitivity analysis shows the results are rather robust. Keywords: growth, welfare, taxation, tax reform, Estonia JEL Classification: H25, H32, O41, O52
Julkaisuhuomautus
Published in Published in Finnish Economic Papers vol 19, no 1 (2006), pp. 25-38