Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/228398
Authors: 
Barrios Cobos, Salvador
Coda Moscarola, Flavia
Figari, Francesco
Gandullia, Luca
Riscado, Sara
Year of Publication: 
2019
Series/Report no.: 
EUROMOD Working Paper No. EM20/19
Abstract: 
Tax expenditures are preferential tax treatments granted to specific individuals or categories of households which aim at achieving social and economic goals. They are widely used by EU Member States. However, their fiscal and equity impacts are not always clear and their effectiveness and efficiency as a policy instrument need to be carefully evaluated, especially in the present context of constrained public finances. This paper quantifies the fiscal and equity effects of social tax expenditures related to housing, education and health in 27 European countries making use of EUROMOD, the EU-wide microsimulation model. We find a variety of effects, in terms of sign and magnitude, across Member States, and within these, among types of households. Overall our findings suggest that the impact of tax expenditure on tax revenues and on income inequalities can be sizeable. The redistributive impact of removing tax expenditures can go both directions, either on the progressive or regressive side, depending on the country and the tax expenditure considered.
Subjects: 
tax expenditures
microsimulation
social tax expenditures
fiscal and equity impact
EUROMOD
JEL: 
H5
H23
H24
Document Type: 
Working Paper

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