Income tax reform in France: A case study

Helmuth Cremer, Firouz Gahvari, Norbert Ladoux

Research output: Contribution to journalArticlepeer-review

Abstract

This paper calibrates the graduated income tax system currently in place in France while assuming that the number of earning-ability types in the economy is four. It also computes the optimal linear and nonlinear income tax schedules for this economy. Its main finding is that while an optimal linear income tax is (in most scenarios) welfare-superior to the current tax system, the welfare gain may be small. On the other hand, an optimal general income tax leads to substantial welfare gains over the present system.

Original languageEnglish (US)
Pages (from-to)121-133
Number of pages13
JournalFinanzArchiv
Volume66
Issue number2
DOIs
StatePublished - Jun 2010

Keywords

  • Flat tax
  • General income tax
  • Welfare gains

ASJC Scopus subject areas

  • Finance

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