The long-term economic impact of the flat tax in Poland. CGE simulation under alternative assumptions

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dc.contributor.authorBoratyński, Jakub
dc.contributor.authorBorowski, Jakub
dc.contributor.organizationUniversity of Lodz, Faculty of Economics and Sociology, Department of Theory and Analyses of Economic Systemen
dc.contributor.organizationWarsaw School of Economics, Collegium of World Economy, Department of Economics IIen
dc.date.accessioned2014-12-08T20:47:00Z
dc.date.available2014-12-08T20:47:00Z
dc.date.issued2012
dc.description.abstractThe purpose of this paper is to assess the long-term macroeconomic effects of introducing the flat personal income tax at the level of 18% in Poland. We perform the simulation on a static CGE (computable general equilibrium) model which helps track the reaction of the economy on the impulse arising from the change in the tax regime. We assume that the gap in government revenues arising from the flat tax introduction will be fully matched by cuts in government consumption. The literature suggests that the flat tax reform is likely to stimulate labor supply and capital expansion. The actual macroeconomic outcome largely depends on adjustment mechanisms at work – especially the driving force of investment. If the increased household savings were to be fully transformed into investment, GDP gain of 0.7−0.9% is observed, otherwise this effect is dampened to 0–0.2%. The tax regime change in the analyzed form will deepen inequality and is likely to reduce welfare of some (particularly low-income) households.en
dc.description.epersonKrystian Jaworski
dc.identifier.citationJakub Boratyński & Jakub Borowski, 2012. "The long-term economic impact of the flat tax in Poland. CGE simulation under alternative assumptions," Bank i Kredyt, Narodowy Bank Polski, vol. 43(3), pages 5-30.en
dc.identifier.issn0137-5520
dc.identifier.urihttps://open.icm.edu.pl/handle/123456789/5885
dc.language.isoenpl_PL
dc.publisherNarodowy Bank Polskipl_PL
dc.rightsUznanie autorstwa-Na tych samych warunkach 3.0 Polska
dc.rights.urihttp://creativecommons.org/licenses/by-sa/3.0/pl/
dc.subjectflat taxen
dc.subjectCGE modellingen
dc.titleThe long-term economic impact of the flat tax in Poland. CGE simulation under alternative assumptionsen
dc.typearticlepl_PL
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