The aim of this book is to evaluate the stabilizing and redistributive role of tax and transfer systems in Europe and the US. In the �first chapter, we briefly
introduce the method of counterfactual simulations which is applied throughout this book. Chapter 2 compares the effectiveness of automatic stabilizers in Europe
and the US to protect households against income losses and to stabilize aggregate demand. Chapter 3 extends this analysis and asks how much weight European tax and transfer systems put on different income groups to insure them against income shocks. Chapter 4 shifts the focus to the redistributive role of the income tax system in the US during the last three decades and analyzes the direct effects of tax policy reforms on the income distribution. In chapter 5, we �first document how the strength of automatic stabilizers has changed over time in the US. We
then estimate in a set of panel regressions for the US states partisan effects on the stabilizing and redistributive capacity of the income tax system
