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Fiscal union in Europe? Redistributive and stabilizing effects of a European tax-benefit system and fiscal equalization mechanism
Bargain, Olivier
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Dolls, Mathias
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Fuest, Clemens
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Neumann, Dirk
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Peichl, Andreas
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Pestel, Nico
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Siegloch, Sebastian
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URL:
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http://eureka.sbs.ox.ac.uk/4392/1/WP1222.pdf
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Additional URL:
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https://ideas.repec.org/p/btx/wpaper/1222.html
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Document Type:
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Working paper
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Year of publication:
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2012
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The title of a journal, publication series:
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Working Paper / Oxford University Centre for Business Taxation Said Business School
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Volume:
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12/22
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Place of publication:
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Oxford
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Related URLs:
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Publication language:
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English
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Institution:
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School of Law and Economics > VWL, Quantitative Finanzwissenschaft (Peichl 2013-2017)
School of Law and Economics > Soziale Sicherung (Siegloch 2018-2022)
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Subject:
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330 Economics
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Classification:
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JEL:
H2 , H3 , J22,
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Keywords (English):
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European income tax , automatic stabilisation , fiscal union
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Abstract:
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The current debt crisis has given rise to a debate about deeper fiscal integration in Europe. The view is widespread that moving towards a ‘fiscal union’ would have a stabilising effect in the event of macroeconomic shocks. In this paper we study the economic effects of introducing two elements of a fiscal union: Firstly, an EU-wide tax and transfer system and secondly, an EU-wide system of fiscal equalisation. Using the European tax-benefit calculator EUROMOD, we exploit representative household micro data from 11 Eurozone countries to simulate these policy reforms and to study their effects on the distribution of income as well as their impact on automatic fiscal stabilisers. We find that replacing one third of the national tax and transfer systems by a European system would lead to significant redistributive effects both within and across countries. These effects depend on income levels and the structures of the existing national tax and transfer systems. The EU system would improve fiscal stabilisation especially in credit constrained countries. It would absorb between 10 and 15 per cent of a macroeconomic income shock. Introducing a fiscal equalisation system based on taxing capacity would redistribute revenues from high to low income countries. The stabilisation properties of this system, however, are ambiguous. This suggests that not all forms of fiscal integration will improve macroeconomic stability in the Eurozone.
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 | Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation. |
 Search Authors in
BASE:
Bargain, Olivier
;
Dolls, Mathias
;
Fuest, Clemens
;
Neumann, Dirk
;
Peichl, Andreas
;
Pestel, Nico
;
Siegloch, Sebastian
Google Scholar:
Bargain, Olivier
;
Dolls, Mathias
;
Fuest, Clemens
;
Neumann, Dirk
;
Peichl, Andreas
;
Pestel, Nico
;
Siegloch, Sebastian
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