Enriching income data with expenditure information: a semi-parametric imputation technique.

In this paper we describe a methodology for enriching an income dataset with information on expenditures using a semi-parametric imputation technique. Engel curves are first estimated semi-parametrically on household budget data. We then show how the technique can be used to impute expenditure information into a separate income dataset. As an example we show results from the imputation of expenditures in a separate income file using Belgian household budget data.

Enriching income data with expenditure information: a semi-parametric imputation technique

In this paper we describe a methodology for enriching an income dataset with information on expenditures using a semi-parametric imputation technique. Engel curves are first estimated semi-parametrically on household budget data. We then show how the technique can be used to impute expenditure information into a separate income dataset. As an example we show results from the imputation of expenditures in a separate income file using Belgian household budget data.

A Belgian flat income tax: effects on labour supply and income distribution

The adverse distributional effects of a flat tax are well known and have been documented by empirical research in several countries, including Belgium. Advocates of the flat tax argue, correctly, that these studies do not take into account agents’ behavioural reactions and possible feed back effects. One of the important effects in this context is the potential increase in labour supply and the resulting increase in the taxable base and decrease in unemployment allowances. In this study we calculate the cost recovery based on a micro-simulation model that includes a labour supply model. We find that there is indeed a clearly positive effect on labour supply and hence also on the tax base. By introducing a revenue-neutral flat tax, labour supply increases by approximately 47,000 full-time equivalents. However, the effect is limited because, compared to a static scenario the cost recovery only allows the revenue-neutral flat tax to decrease from 38.5% to 37%. Furthermore, there is little or no impact of these employment effects on the strongly regressive nature of a flat tax reform.

A Belgian flat income tax: effects on labour supply and income distribution.

The adverse distributional effects of a flat tax are well known and have been documented by empirical research in several countries, including Belgium. Advocates of the flat tax argue, correctly, that these studies do not take into account agents’ behavioural reactions and possible feed back effects. One of the important effects in this context is the potential increase in labour supply and the resulting increase in the taxable base and decrease in unemployment allowances. In this study we calculate the cost recovery based on a micro-simulation model that includes a labour supply model. We find that there is indeed a clearly positive effect on labour supply and hence also on the tax base. By introducing a revenue-neutral flat tax, labour supply increases by approximately 47,000 full-time equivalents. However, the effect is limited because, compared to a static scenario the cost recovery only allows the revenue-neutral flat tax to decrease from 38.5% to 37%. Furthermore, there is little or no impact of these employment effects on the strongly regressive nature of a flat tax reform.

Why and how to construct a genuine Belgian price index for house sales?.

Assessing the price evolution of houses on the basis of average sales prices, as is current practice in Belgium, might be misleading due to changing characteristics of the houses sold in the periods observed. A hedonic index which takes into account changes in characteristics is more appropriate. We use the budget surveys of the Belgian Statistical Institute to illustrate how this also applies for Belgium. The estimated hedonic price index for house sales on the secondary market is practically always below the index based on average sales values for the period considered. This demonstrates the need to collect more extensive data on the characteristics of the dwellings sold in Belgium.Indexes; Sales;

Indirect taxes and social policy: Distributional impact of alternative financing of social security.

The role of indirect taxes in social policy is investigated by 1) comparing the distributional pattern of indirect taxes with the one of personal income taxes and social security contributions; 2) calculating the indirect tax liabilities for recipients of social benefits; 3) assessing the distributional impact of shifting the financing of social security from contributions to indirect taxes. For this purpose we combine the data of the Household Budget Survey and the Socio-Economic Panel, as well as two microsimulation models, namely ASTER (for the calculation of indirect taxes) and MISIM (for the calculation of personal income taxes and social contributions)Belgium; Effects; Income taxes; Personal; World; Labour market; Market; Responses; Model; Social policy; Policy; Impact;

Welfare effects of alternative financing of social security. Some calculations for Belgium.

We analyse the distributional impact of lowering social security contributions and compensating the revenue loss by an increase in indirect taxes. We empirically assess the distributional consequences of this shift by using two Belgian microsimulation models: modété for the tax benefit system, and aster for the indirect tax part. Since the underlying micro database of the tax benefit system does not contain expenditures, we first impute detailed expenditures in the income data survey, by means of semiparametric Engelcurves. The currently living generation of pensioners belongs to the losers by such a reform: They do not profit from the reduced tax on labour income, but pay higher consumption prices. Less obvious, also part of the working population loses. Even not all those who leave unemployment after the reform are gainers. We also investigate the sensitivity of the results w.r.t. the choice of welfare measure to assess the combined change in disposable income, consumer prices and - in the case of exible labour supply - leisure. We show how the specific choice and parameters of the welfare measure will influence the conclusions, possibly even more than the predictive model for assessing the behavioural reactions in labour supply.

Welfare effects of alternative financing of social security. Some calculations for Belgium

We analyse the distributional impact of lowering social security contributions and compensating the revenue loss by an increase in indirect taxes. We empirically assess the distributional consequences of this shift by using two Belgian microsimulation models: MODÉTÉ for the tax benefit system, and aster for the indirect tax part. Since the underlying micro database of the tax benefit system does not contain expenditures, we first impute detailed expenditures in the income data survey, by means of semiparametric Engelcurves. The currently living generation of pensioners belongs to the losers by such a reform: They do not profit from the reduced tax on labour income, but pay higher consumption prices. Less obvious, also part of the working population loses. Even not all those who leave unemployment after the reform are gainers. We also investigate the sensitivity of the results w.r.t. the choice of welfare measure to assess the combined change in disposable income, consumer prices and - in the case of flexible labour supply - leisure. We show how the specific choice and parameters of the welfare measure will influence the conclusions, possibly even more than the predictive model for assessing the behavioural reactions in labour supply.microsimulation, social security contributions, demand system, indirect taxes, labour supply

Onzin blijft onzin, of waarom de vlaktaks van Niemegeers en Pompen noch rechtvaardig, noch doeltreffend is

status: publishe

Effecten van een voorgestelde regionale inkomstenbelasting op de regionale ontvangsten

We gebruiken een rekenmodel voor de personenbelasting om de gevolgen uit te rekenen van het voorstel voor een geregionaliseerde personenbelasting in de nota De Wever. Het rekenmodel verschilt van alle tot nu toe geproduceerde berekeningen omdat het de belasting uitrekent voor elk Vlaams, Waals en Brussels gezin in een representatieve steekproef. Dat laat toe de effecten van progressiviteit echt in kaart te brengen. Macrocijfers doen dit niet. De berekeningen bevestigen de kritiek dat er een fundamentele tegenstrijdigheid zit in de berekeningen van de gevolgen van de voorgestelde regionale inkomstenbelasting. De tegenstrijdigheid heeft te maken met de voorstelling van de regionale inkomstenbelasting als een split-rate model. Dat komt erop neer dat de regionale tarieven ‘afgesplitst’ worden van de federale tarieven, en de progressiviteit ervan overnemen. Als de regionale inkomstenbelasting de progressiviteit van de federale tarieven overneemt, dan zijn de berekeningen fout. Als we de berekeningen aanvaarden, dan is de voorgestelde regionale inkomstenbelasting, in tegenstelling tot wat men beweert, niet deze van een gesplitst tarief op basis van de huidige tarieven, maar wel op basis van een forse belastingverhoging voor Wallonië en Brussel, en een belastingverlaging voor Vlaanderen. Het verschil in uitkomst heeft niet te maken met andere ‘politieke’ uitgangspunten zoals bijvoorbeeld de vraag of men voor of tegen meer fiscale autonomie of pro of contra responsabilisering zou zijn. De cijferdiscussie gaat simpelweg echt wel over de berekening van het voorstel van regionale inkomstenbelasting in de nota zelf. Daarvoor gebruiken we allemaal dezelfde rekenkunde. Het verschil heeft ook niet te maken met een andere manier om de solidariteitscomponent in de Financieringswet vast te leggen (bijvoorbeeld op basis van verschillen in belastbaar inkomen, of op basis van verschillen in belastingopbrengsten). Dit lijkt een technische discussie, maar de gevolgen lopen in de honderden miljoenen voor zowel Wallonië, als Brussel. De orde van grootte van opsmuk van regionale inkomsten voor Wallonië bedraagt in onze berekeningen 311 miljoen. De regionale inkomsten van Vlaanderen daarentegen worden meer dan 600 miljoen minder gunstig voorgesteld dan ze in werkelijkheid zullen zijn. Los van de eigen doelstellingen, is geen enkel politiek of maatschappelijk debat gebaat met het verkeerd voorstellen van gevolgen van bepaalde keuzes. Wel integendeel. Alleen als er met open vizier over de gevolgen van eventuele beslissingen gecommuniceerd wordt, is er een kans op een vergelijk waarbij niemand zich later bedrogen voelt. De berekeningen dienen zeker verder verfijnd om een split-rate model in al zijn finesses (en moeilijkheden) door te rekenen. Maar het voordeel van ons model is dat we tot op het niveau van het individu of het gezin kunnen in kaart brengen hoe het belastbaar inkomen, en dus ook het beschikbaar inkomen verandert ten gevolge van het voorstel. De politieke haalbaarheid van een voorstel hangt ons inziens cruciaal af van deze verdelingseffecten.status: publishe