English, Article, Journal or magazine article edition: An Evaluation of the Tax-Transfer Treatment of Married Couples in European Countries Herwig Immervoll; Henrik Jacobsen Kleven; Claus Thustrup Kreiner; ...

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Bookmark: http://trove.nla.gov.au/version/86536
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • An Evaluation of the Tax-Transfer Treatment of Married Couples in European Countries
Author
  • Herwig Immervoll
  • Henrik Jacobsen Kleven
  • Claus Thustrup Kreiner
  • Nicolaj Verdelin
Physical Description
  • preprint
Notes
  • This paper presents an evaluation of the tax-transfer treatment of married couples in 15 EU countries using the EUROMOD microsimulation model. First, we show that many tax-transfer schemes in Europe feature negative jointness defined as a situation where the tax rate on one person depends negatively on the earnings of the spouse. This stands in contrast to the previous literature on this question, which has focused on a specific form of positive jointness. The presence of negative jointness is driven by family-based and means-tested transfer programs combined with tax systems that usually feature very little jointness. Second, we consider the labour supply distortion on secondary earners relative to primary earners implied by the current tax-transfer systems, and study the welfare effects of small reforms that change the relative taxation of spouses. By adopting a small-reform methodology, it is possible to set out a simple analysis based on more realistic labour supply models than those considered in the existing literature. We present microsimulations showing that simple revenue-neutral reforms that lower the tax burden on secondary earners are associated with substantial welfare gains in most countries. Finally, we consider the tax-transfer implications of marriage and estimate the so-called marriage penalty. For most countries, we find large marriage penalties at the bottom of the distribution driven primarily by features of the transfer system.Ce document présente une évaluation des régimes d’imposition et de transfert des couples mariés dans 15 pays de l’UE à l’aide du micro-modèle de simulation EUROMOD. Nous montrons tout d’abord qu’en Europe, de nombreux régimes d’imposition et de transfert font ressortir des caractéristiques négatives résultant de l’imposition conjointe, dans la mesure où le taux d’imposition appliqué à un contribuable dépend des gains du conjoint, ce qui est désavantageux pour lui. Cette observation va à l’encontre des études consacrées précédemment à cette question, qui faisaient ressortir les aspects positifs de l’imposition conjointe. Les effets négatifs de l’imposition conjointe des revenus tiennent au fait que les programmes de transfert sont modulés en fonction des charges de famille et subordonnées à des critères de ressources, conjugués aux effets de régimes fiscaux qui, d’ordinaire font très peu de place à l’imposition conjointe. Deuxièmement, nous considérons l’effet de distorsion exercé sur l’offre de main-d’oeuvre dû au fait que les seconds apporteurs de revenu sont pénalisés par rapport aux premiers apporteurs de revenu par les systèmes actuels d’imposition-de transfert, et étudions les effets sur le bien-être de réformes de portée restreinte modifiant la fiscalité relative applicable aux conjoints. L’adoption d’une méthode préconisant une réforme de portée restreinte, permet de faire apparaître une analyse simple, fondée sur des modèles plus réalistes de l’offre de main-d’oeuvre que ceux qui sont pris en compte dans les travaux actuels. Nous présentons des micro-simulations montrant que de simples réformes, neutres en termes de recettes, qui permettent d’abaisser le poids de la fiscalité applicable aux seconds apporteurs de revenu, entraînent des hausses substantielles de bien-être dans la plupart des pays. Enfin, nous considérons les répercussions du mariage sur le régime d’imposition-de transfert et procédons à l’estimation de ce que l’on appelle la pénalisation du mariage. Dans la plupart des pays, nous observons que cette pénalisation est forte au bas de l’échelle de distribution des revenus et s’explique essentiellement par des caractéristiques du système de transfert.
  • RePEc:oec:elsaab:76-en
  • This paper presents an evaluation of the tax-transfer treatment of married couples in 15 EU countries using the EUROMOD microsimulation model. First, we show that many tax-transfer schemes in Europe feature negative jointness defined as a situation where the tax rate on one person depends negatively on the earnings of the spouse. This stands in contrast to the previous literature on this question, which has focused on a specific form of positive jointness. The presence of negative jointness is driven by family-based and means-tested transfer programs combined with tax systems that usually feature very little jointness. Second, we consider the labor supply distortion on secondary earners relative to primary earners implied by the current tax-transfer systems, and study the welfare effects of small reforms that change the relative taxation of spouses. By adopting a small-reform methodology, it is possible to set out a simple analysis based on more realistic labor supply models than those considered in the existing literature. We present microsimulations showing that simple revenue-neutral reforms that lower the tax burden on secondary earners are associated with substantial welfare gains in most countries. Finally, we consider the tax-transfer implications of marriage and estimate the so-called marriage penalty. For most countries, we find large marriage penalties at the bottom of the distribution driven primarily by features of the transfer system.
  • RePEc:kud:epruwp:08-03
Language
  • English
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