The Dynamics of Tax Elasticities in the Whole European Union

Mourre, Gilles; Princen, Savina

doi:10.1093/cesifo/ify028

Cited by 11 publications

(27 citation statements)

References 11 publications

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“…Thus, the estimated SR elasticity indicates a significantly lower impact of wages on revenues than does the estimated LR elasticity. Our results for Germany are in line with the findings of Koester and Priesmeier (2012), Mourre and Princen (2019), Bouthevillain et al (2001), and Boschi and d'Addona ( 2019), all of whom report lower tax-to-base elasticities in the SR than in the LR. The adjustment parameter indicates that deviations from the long-term equilibrium between revenues and tax base require almost seven quarters.…”

Section: Resultssupporting

confidence: 92%

“…Regarding LR elasticities, we find a particularly low value for Germany of 0.6. However, Mourre and Princen (2019) and Koester and Priesmeier (2012) estimate a LR elasticity of similar magnitude. The LR tax-to-base elasticity is 0.8 and 0.9 for the UK and the US, respectively.…”

Section: Resultsmentioning

confidence: 82%

“…Both elasticities are significantly greater than unity. According to Mourre and Princen (2019), such a reduction in the effectiveness of the tax system's progressivity in the LR could be due to various tax exclusions, exemptions, or deductions that narrow the tax base and benefit high-income earners. Compared to Germany, revenues have the tendency to adjust more quickly to deviations from the LR equilibrium.…”

Section: Resultsmentioning

confidence: 99%

“…First, we use a newly constructed, much richer quarterly dataset. For instance, Mourre and Princen (2019) is based on only 13 years of annual data, which is likely not long enough to precisely estimate long-term relationships. Boschi and D'Addona (2019) use dummies to model the revenue adjustments, which implies that a major cut/hike is treated the same as a minor change.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Estimating Policy‐Corrected Long‐Term and Short‐Term Tax Elasticities for the United States, Germany, and the United Kingdom

2021

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Section: Resultssupporting

confidence: 92%

Section: Resultsmentioning

confidence: 82%

Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Estimating Policy‐Corrected Long‐Term and Short‐Term Tax Elasticities for the United States, Germany, and the United Kingdom

2021

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“…Nevertheless, we should bear in mind that tax revenues have a different elasticity across countries and, most likely, industry specialisation and the fi rm size distribution affect that elasticity. The estimates of Koester and Priesmeier (2017), and Mourre and Princen (2019) go in that direction.…”

Section: Figure 1 Employment Specialisation Across European Regions 2016mentioning

confidence: 83%

Common Fiscal Capacity Is Needed to Strengthen Risk Sharing

Díaz

2020

Intereconomics

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Estimating policy-corrected long-term and short-term tax elasticities for the USA, Germany, and the United Kingdom

2022

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We estimate the elasticities of the most important tax categories using a new quarterly database of discretionary tax measures for the USA, Germany, and the United Kingdom over the period 1980Q1 to 2018Q2. Employing Romer and Romer’s (2009) narrative approach, we construct a policy-neutral dataset based on revenue figures from governmental records. Using this quantitative information, we are able to subtract policy-induced changes, which often are not considered in the literature. Furthermore, we estimate state-dependent elasticities. Our conclusions are as follows. (i) In Germany and the UK, long-term tax-to-base elasticities are generally higher than short-term elasticities, whereas results for the USA are mixed. (ii) Short-term base-to-output elasticities tend to be smaller than unity, whereas long-term elasticities are close to unity. (iii) German and UK tax-to-output elasticities in the short term are lower than long-term elasticities, with mixed results for the USA. (iv) For tax-to-base elasticities, we find business-cycle asymmetries across countries but not within countries. (v) For base-to-output elasticities, our results suggest few asymmetries across countries and more asymmetries across tax types. (vi) Typically, the above conclusions do not hold for corporate income tax.

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The Dynamics of Tax Elasticities in the Whole European Union

Cited by 11 publications

References 11 publications

Estimating Policy‐Corrected Long‐Term and Short‐Term Tax Elasticities for the United States, Germany, and the United Kingdom

Estimating Policy‐Corrected Long‐Term and Short‐Term Tax Elasticities for the United States, Germany, and the United Kingdom

Common Fiscal Capacity Is Needed to Strengthen Risk Sharing

Estimating policy-corrected long-term and short-term tax elasticities for the USA, Germany, and the United Kingdom

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