2023-09-28 14:46:10 +00:00
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abstract: 'A flat tax rate on labour income has gained popularity in European
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countries. This article assesses the attractiveness of such a flat tax
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in achieving redistributive objectives with the smallest distortions to
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employment. We do so by using a detailed applied general equilibrium
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model for the Netherlands. The model is empirically grounded in the data
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and encompasses decisions on hours worked, labour force participation,
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skill formation, wage bargaining between unions and firms and a wide
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variety of institutional details. The simulations suggest that the
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replacement of the current tax system in the Netherlands by a flat rate
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will harm labour market performance if aggregate income inequality is
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contained. Only flat tax reforms that reduce redistribution will raise
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employment. This finding bolsters the notions from optimal tax
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literature regarding the equity-efficiency trade off and the superiority
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of nonlinear taxes to obtain redistributive goals in an efficient way.'
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affiliation: 'de Mooij, RA (Corresponding Author), Erasmus Univ, Tinbergen Inst \&
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Netspar, POB 1738, NL-3000 DR Rotterdam, Netherlands.
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Jacobs, Bas; de Mooij, Ruud A., Erasmus Univ, Tinbergen Inst \& Netspar, NL-3000
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DR Rotterdam, Netherlands.
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Jacobs, Bas; de Mooij, Ruud A., Erasmus Univ, CESifo, NL-3000 DR Rotterdam, Netherlands.
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de Mooij, Ruud A.; Folmer, Kees, CPB Netherlands Bur Econ Policy Anal, NL-2508 GM
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The Hague, Netherlands.'
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article-number: PII 910490212
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author: Jacobs, Bas and de Mooij, Ruud A. and Folmer, Kees
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author-email: radm@cpb.nl
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author_list:
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- family: Jacobs
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given: Bas
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- family: de Mooij
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given: Ruud A.
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- family: Folmer
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given: Kees
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da: '2023-09-28'
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doi: 10.1080/00036840802112356
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eissn: 1466-4283
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files: []
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issn: 0003-6846
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journal: APPLIED ECONOMICS
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keywords-plus: MARGINAL TAX RATES; UK ECONOMY; REFORM; WELFARE
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language: English
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number: '25'
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number-of-cited-references: '26'
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pages: 3209-3220
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papis_id: 263f75f60b39e9dac6313c74226e5795
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ref: Jacobs2010flatincome
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times-cited: '7'
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title: Flat income taxation, redistribution and labour market performance
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2023-10-01 08:15:07 +00:00
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type: article
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2023-09-28 14:46:10 +00:00
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unique-id: WOS:000282121800003
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usage-count-last-180-days: '0'
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usage-count-since-2013: '12'
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volume: '42'
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web-of-science-categories: Economics
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year: '2010'
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