In this paper we empirically derive the welfare effects of a shift from joint taxation with full income splitting to a revenue neutral system of individual taxation in Germany. For the empirical welfare evaluation we estimate the preference heterogeneity in the population and use normative...

[Note:] This paper is an adapted version of the substantive part of the Final Report to the European Commission of the project 'Accurate Income Measurement for the Assessment of Public Policies (AIM-AP)', under Priority 7 'Citizens and Governance in a Knowledge-based Society' of Framework...

The adverse distributional effects of a flat tax are well known and have been documented by empirical research in several countries, including Belgium. Advocates of the flat tax argue, correctly, that many of these studies do not take into account agents' behavioural reactions and possible feed...

Following the report of the Stiglitz Commission, measuring and comparing well-being across countries has gained renewed interest. Yet, analyses that go beyond income and incorporate non-market dimensions of welfare most often rely on the assumption of identical preferences to avoid the...

In this paper we describe a methodology for enriching an income dataset with information on expenditures using a semi-parametric imputation technique. Engel curves are first estimated semi-parametrically on household budget data. We then show how the technique can be used to impute expenditure...

Assessing the price evolution of houses on the basis of average sales prices, as is current practice in Belgium, might be misleading due to changing characteristics of the houses sold in the periods observed. A hedonic index which takes into account changes in characteristics is more...

The role of indirect taxes in social policy is investigated by 1) comparing the distributional pattern of indirect taxes with the one of personal income taxes and social security contributions; 2) calculating the indirect tax liabilities for recipients of social benefits; 3) assessing the...

Between 1988 and 1993 the Belgian personal income tax system and the indirect tax system have been reformed to a considerable extent. We use microsimulation models to investigate the impact of the reform on the liability progression and the redistributive effect of the combined tax system. The...

Administrative data on personal income taxes and household budget surveys differ in at least one important respect: the definition of the unit of observation. The sociological concept of a household does not coincide with the administrative definition of a fiscal unit. We investigate whether the...

In this paper we investigate the progressivity impact of various components of the Belgian personal income tax system, before and after a major reform of this system. The reform reduced the top tax rates, broadened the tax base and increased tax credits. We show that, contrary to the opinion,...