For Better or for Worse: Tax Reform in the Netherlands

Boer, H.W. de

doi:10.1007/s10645-016-9272-5

Cited by 2 publications

(1 citation statement)

References 29 publications

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“…The replacement of payroll tax with a tax on revenues has a positive impact on consumption and employment (Bernardino da Silva et al, 2015). Many studies showed that income and corporate tax reforms lead to increases in economic growth, employment, and welfare (Yang, 2016;de Boer, 2016;Atkinson et al, 2017;Annicchiarico and Cesaroni, 2018;Yamada, 2011), while others reported negative impacts (Balatskii, 2006;Waseem, 2018). Similarly, Bencz ur et al (2018) showed that high-income groups will benefit from flat tax reform policies, while low-income workers will lose their jobs and work incentives.…”

Section: Literature Reviewmentioning

confidence: 99%

Assessing the economic and social impacts of fiscal policies

Solaymani

2020

JES

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PurposeThis study is the first attempt to analyze the effectiveness of recent two major tax policies, the reductions in personal and corporate income taxes and a rise in indirect tax and their combine, under both balanced and unbalanced budget conditions, on the economy and social aspects of Malaysia.Design/methodology/approachThis study uses a computable general equilibrium model to investigate the impacts of all simulation scenarios on the key macro and micro indicators. Further, based on the 2012 Malaysia Household Income and Expenditure Survey, it uses a micro-data with a significant number of households (over 56,000 individuals) to analyze the impacts of tax policies on poverty and income inequality of Malaysian.FindingsSimulation results show that, under the balanced budget condition, personal and corporate income tax reductions increase economic growth, household consumption, and investment, while the rise in indirect tax has adverse impacts on these variables. However, in the unbalanced budget condition, all tax policies, except indirect tax policy, reduce real GDP and investment in the economy and the indirect tax policy has insignificant impacts on all indicators. All policy reforms reallocate resources, especially labor, in the economy. In both budget conditions, the reductions in corporate and personal income taxes, particularly the corporate income tax, decrease poverty level of Malaysian households. Results also indicate that both tax policies are unable to influence income inequality in Malaysia.Social implicationsThis study recommends that the government can increase its revenue by increasing indirect taxes as it does not have any impact on household welfare. In order to increase government revenues, initial increases in personal and corporate income taxes are suggested as they may have small negative impacts on the economy and welfare of households.Originality/valueOne of the significant features of this paper is that it examines both expansionary and contractionary fiscal policies in a country that government budget depends on oil exports. Since the literature on this subject is limited, particularly in the Malaysian context, the authors used Malaysia as a case to show how tax reform policies affect the economy and poverty level of such countries. Distinguishing the Malaysian households into 10 deciles and analyzing the distributional impacts of tax policies on these categories are the most significant contributions of this study.

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