I will try to develop my discussion along 4 main lines: Þrst of all I will brießy summarise the results of the Microsimulation study. Then I will make some observations on the actions that could be taken to tackle the adverse distributional effects. I will also try to make some comparison between the German case and the Italian case with which I am more familiar. Finally I will stress the importance of taking into account the way people react (even in the short run) to Þscal reforms, i.e. the importance of behavioural responses. 1. The main results of the Microsimulation study can be summarised as follows: a) when no Revenue Recycling is undertaken, the reform appears to be only slightly regressive and the only energy tax that does not have a regressive effect up to the income bracket 25.000 to 30.000 Euro is the Motor Fuel Tax, among those considered by the German reform; the tax on heating oil, on the other hand causes a very high burden on the lowest income households, higher than the tax on fuels (see table 4 of the Bork paper); b) when Revenue Recycling (RR henceforth) is undertaken, in the form of a reduction in Social Security Contributions, the Regressive effect is intensiÞed (table 10); c) the chosen type of RR mostly favours the middle and upper income classes; d) at very low income levels RR does not decrease AT ALL th
To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.