Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/275641 
Year of Publication: 
2023
Series/Report no.: 
ECONtribute Policy Brief No. 051
Publisher: 
University of Bonn and University of Cologne, Reinhard Selten Institute (RSI), Bonn and Cologne
Abstract: 
An important question in public economics is whether, and under what conditions, it may be possible to design a self-financing tax cut. This column provides new theoretical insights on the requirements for a tax reform that makes everyone better off. Furthermore, it shows that if there is no self-financing tax cut with changes to one or two income brackets, then a more complicated reform will also not work. It applies these insights to the US Earned Income Tax Credit reform in 1975. Although this reform had the correct properties, the analysis concludes that it was not fully self-financing. [...]
Document Type: 
Research Report

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