Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108713
Authors: 
Moscarola, Flavia Coda
Colombino, Ugo
Figari, Francesco
Locatelli, Marilena
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 8832
Abstract: 
A tax shifting from labour income to housing taxation is generally advocated on efficiency grounds. However, most of the empirical literature focuses on the distributional implications of property tax reforms without paying much attention to potential consequences on the labour market. The aim of this paper is to fill this gap by investigating the effects of a tax shifting from labour income to property, guaranteeing revenue neutrality, and to assess the consequences of labour market equilibrium, both on occupation rates and income distribution. We propose to consider a hypothetical tax reform in Italy which uses the revenue of the tax on house property (actually implemented in 2012) for increasing tax credits on low incomes and making them refundable. In order to evaluate the reform we have developed a structural model of household labour supply which takes into account the labour market equilibrium conditions. Overall, the simulated policy provides a more effective income support and better incentives to work for low wage households and determines an improvement in inequality indexes.
Subjects: 
labour supply
tax shifting
personal tax on labour income
property tax
labour market equilibrium
microsimulation
JEL: 
C35
C53
D31
J22
H31
Document Type: 
Working Paper

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