abstract: 'A flat tax rate on labour income has gained popularity in European

  countries. This article assesses the attractiveness of such a flat tax

  in achieving redistributive objectives with the smallest distortions to

  employment. We do so by using a detailed applied general equilibrium

  model for the Netherlands. The model is empirically grounded in the data

  and encompasses decisions on hours worked, labour force participation,

  skill formation, wage bargaining between unions and firms and a wide

  variety of institutional details. The simulations suggest that the

  replacement of the current tax system in the Netherlands by a flat rate

  will harm labour market performance if aggregate income inequality is

  contained. Only flat tax reforms that reduce redistribution will raise

  employment. This finding bolsters the notions from optimal tax

  literature regarding the equity-efficiency trade off and the superiority

  of nonlinear taxes to obtain redistributive goals in an efficient way.'
affiliation: 'de Mooij, RA (Corresponding Author), Erasmus Univ, Tinbergen Inst \&
  Netspar, POB 1738, NL-3000 DR Rotterdam, Netherlands.

  Jacobs, Bas; de Mooij, Ruud A., Erasmus Univ, Tinbergen Inst \& Netspar, NL-3000
  DR Rotterdam, Netherlands.

  Jacobs, Bas; de Mooij, Ruud A., Erasmus Univ, CESifo, NL-3000 DR Rotterdam, Netherlands.

  de Mooij, Ruud A.; Folmer, Kees, CPB Netherlands Bur Econ Policy Anal, NL-2508 GM
  The Hague, Netherlands.'
article-number: PII 910490212
author: Jacobs, Bas and de Mooij, Ruud A. and Folmer, Kees
author-email: radm@cpb.nl
author_list:
- family: Jacobs
  given: Bas
- family: de Mooij
  given: Ruud A.
- family: Folmer
  given: Kees
da: '2023-09-28'
doi: 10.1080/00036840802112356
eissn: 1466-4283
files: []
issn: 0003-6846
journal: APPLIED ECONOMICS
keywords-plus: MARGINAL TAX RATES; UK ECONOMY; REFORM; WELFARE
language: English
number: '25'
number-of-cited-references: '26'
pages: 3209-3220
papis_id: 263f75f60b39e9dac6313c74226e5795
ref: Jacobs2010flatincome
times-cited: '7'
title: Flat income taxation, redistribution and labour market performance
type: article
unique-id: WOS:000282121800003
usage-count-last-180-days: '0'
usage-count-since-2013: '12'
volume: '42'
web-of-science-categories: Economics
year: '2010'