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The removal of tax expenditures from Spanish personal income tax: Impact on tax collection and income distribution
Author(s) -
LópezLaborda Julio,
MarínGonzález Carmen,
Onrubia Jorge
Publication year - 2022
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/pbaf.12312
Subject(s) - economics , value added tax , indirect tax , ad valorem tax , tax revenue , state income tax , distribution (mathematics) , public economics , gross income , double taxation , tax reform , labour economics , mathematics , mathematical analysis
The paper estimates the consequences for tax revenue and income distribution of the removal of the tax expenditures from Spanish Personal Income Tax (IRPF) in place during the 2013 tax year. The paper concludes that the removal of all the tax expenditures analyzed would increase revenue by €24,457 million (37.9% of the IRPF actual collection), and that the redistributive effect, measured by the Reynolds‐Smolensky index, would be reduced by 1.1%. The paper also analyzes sundry hypothetical scenarios involving the refunding to individuals of the tax collected through the removal of tax expenditures, and its distributive impact is quantified.