Tax Systems under Fiscal Adjustment: A Dynamic CGE Analysis of the Brazilian Tax Reform

 
Author/Editor: Lledo, Victor Duarte
 
Publication Date: July 01, 2005
 
 
Summary: This paper uses a dynamic computable general equilibrium model (CGE) to analyze the macroeconomic and redistributive effects of replacing turnover and financial transaction taxes in Brazil by a consumption tax. In order to approximate Brazil's compliance with its fiscal adjustment targets, the proposed reform is subject to a non increasing path for the level of public debt. Despite an increase in the average consumption tax rate in the first years after the reform, a majority of individuals experienced an increase in their lifetime welfare. This result rejects the hypothesis that the on-going fiscal adjustment effort carried on by the Brazilian government was an obstacle to the implementation of a more efficient tax system.
 
Subject(s): Tax reforms | Brazil | Fiscal reforms | Economic models

Author's Keyword(s): Tax reform | fiscal adjustment | computable general equilibrium | Brazil
 
English
Publication Date: July 01, 2005
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2005142 Pages: 33
Price:
US$15.00 (Academic Rate:
US$15.00 )
 
 
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