The financial crisis and fiscal consolidation in green budgets

This project adds insight into the potential contribution to fiscal consolidation from environmental tax and subsidy reforms, i.e. strengthening public budgets while at the same time improving economic efficiency and the environment. The report contributes with own calculations for potential revenues from environmental taxes and discusses the financial crisis and environmental tax policy responses in Iceland, Estonia and Ireland as case studies.The analysis has been carried out during the period July 2012 – December 2012 by Vista Analysis AS, Norway, Reykjavik University, Iceland and PRAXIS Center for Policy Studies, Estonia. The project was commissioned by the Nordic Council of Ministers

Flat tax reform in Eastern Europe: a comparative analysis of alternative scenarios in Estonia, Hungary and Slovenia, using EUROMOD

Flat tax schemes are popular in Eastern Europe, with an ever increasing number of countries where it is introduced, and yet many other where it is recurringly discussed. Analysing three countries, we show that the design of such schemes largely determines their impact on fiscal revenues and on the redistribution of individuals’ incomes. The impact, as expected, also largely depends on the characteristics of the existing income tax system. Three different flat tax systems (Estonian, already implemented; Slovenian and Hungarian, only proposals) are simulated in each of the three countries. The analysis is based on EUROMOD, the European tax-benefit microsimulation model, which now includes these countries, enabling cross-country comparisons. The results also confirm the value of EUROMOD which proves to be a valuable tool for international policy comparisons.

The Effects of Taxes and Benefits on Income Distribution in the Enlarged EU

Tax and benefit systems in the enlarged EU vary significantly in size and structure. We examine how taxesand benefits shape income distributions in 19 EU countries, focusing on the differences between WesternEuropean countries (EU15) and Eastern European countries (Estonia, Hungary, Poland, Slovenia). We useEUROMOD, the European tax-benefit microsimulation model, which simulates taxes and benefits forrepresentative samples of household micro-data and through a common framework which allows theanalysis of cross-country differences on a comparable basis. The analysis concentrates on the distributionand composition of incomes, and the effect of taxes and benefits on poverty and inequality