Income tax is a major component of state revenues, earmarked to finance the services provided by government. taxes have significant impact, among other things, on economic growth and income distribution. According theory, personal tax—perceived as progressive tax—is main policy tool governments developed countries aimed at reducing inequality in The Israeli in- come has been through refo...

Public sector reforms for several decades have been premised on the assumption that improving the ability of government to manage its business will lead to improved social and economic progress. The 1997 World Bank Report describes a first generation of reforms in which steps were taken to cut government expenditures and to revive the private sector. Measures included budget cuts, tax reforms, ...

This paper reviews the basic theoretical models that are appropriate for analyzing different types of welfare reforms, and the related empirical literature. We first present the canonical labor supply model of a classical welfare program, and then extend this basic framework to include in-kind transfers, incomplete take-up, human capital, preference persistence, and borrowing and saving. The em...

a r t i c l e i n f o This paper considers the implications of environmental tax reform and public spending policy for growth and welfare. Using a two-sector endogenous growth model where the interactions between health, education, and the environment are taken into account, we show that revenue-positive tax reforms combined with a change in the public spending structure may improve long-run gr...

Mircrosimulation (MS) and Computable General Equilibrium models (CGE) have both been widely used in policy analysis. Their combination allows the utilisation of the advantages of both types. The aim of this paper is to describe the state-of-the-art in simulation analysis and to illustrate the benefits and problems of linking micro and macro models by analysing flat tax reform proposals for Germ...

This paper examines the macroeconomic effects of environmental tax reform in a growing economy. A model of endogenous growth based on human capital accumulation is used to simulate numerically the growth effects of different environmental tax reforms and calculate their impact on welfare in the short and the long-term. Our results suggest that the magnitude of these effects depends on the type ...

Outsourcing of Unionized Firms and the Impact of Labor Market Policy Reforms This paper shows that outsourcing of parts of workforce in unionized firms leads to wage moderation both in the case of strategic and flexible outsourcing and as long as the share of the outsourced workforce is not too large, this wage-moderation effect on domestic employment outweighs the direct substitution effect so...

We develop a new approach for the identification of Pareto‐improving tax reforms. This yields necessary and sufficient conditions existence reform directions. A main insight is that “Two brackets are enough”: When system cannot be improved by altering rates in one or two income brackets, then there no continuous direction Pareto‐improving. also show how to check whether given use these tools st...