Growth‐Friendly Tax Structures: An Indicator‐Based Approach |
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Authors: | Florian Wöhlbier Caterina Astarita Gilles Mourre |
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Institution: | 1. European Commission, Directorate‐General for Economic and Financial Affairs;2. European Commission, Directorate‐General for Economic and Financial Affairs and University of Naples ‘Federico II’;3. European Commission, Directorate‐General for Economic and Financial Affairs and Université Libre de Bruxelles |
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Abstract: | This paper designs a horizontal indicator‐based assessment methodology aimed at identifying those EU countries presenting a potential need and scope for shifting taxation away from labour to other tax bases less detrimental to growth. The assessment methodology, as a first step, selects a set of indicators measuring specific aspects of tax policy. Subsequently, for each individual indicator, performance thresholds are calculated based on a benchmarking approach. Finally, a screening algorithm based on commonly accepted findings from the relevant economic literature is used to assess the overall performance of a country in two policy areas, namely the need for a tax shift and the scope for it. Various robustness checks are performed. |
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Keywords: | Taxation tax policy tax reforms tax revenue tax structure tax shift labour taxation quality of taxation |
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