Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128351
Authors: 
Kudrna, George
Woodland, Alan D.
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5645
Abstract: 
This paper provides a quantitative analysis of hypothetical replacements of existing tax arrangements applied to superannuation (Australia.s term for private pensions) with traditional EET and TEE regimes. These taxation regimes exempt pension fund earnings from any taxation and tax either benefits or contributions progressively as regular incomes. By contrast, superannuation taxation features concessional flat tax rates on contributions and fund earnings, with benefits being generally tax free. Using an overlapping-generations model calibrated for Australia, we find that these hypothetical superannuation tax reforms have positive implications for vertical equity, as indicated by larger relative welfare gains and income improvements experienced by lower income households. The simulation results also show positive long run effects of the reforms on domestic assets as well as reduced pension expenditures.
Subjects: 
compulsory saving
pension and tax reforms
dynamic OLG model
JEL: 
H55
E21
C68
Document Type: 
Working Paper

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