Shifting from Labor to Consumption Taxes: The Impact on Tax Revenue Volatility
Przejście od opodatkowania pracy do opodatkowania konsumpcji - wpływ na zmienność dochodów podatkowych państwa

Tomasz Jędrzejowicz, Kamila Sławińska
2014 Gospodarka Narodowa  
This paper provides estimates of tax revenues with respect to their individual tax bases, focusing on differences between long-and short-run elasticities and allowing for asymmetries in the speed of adjustment as well as in short-run volatility. Estimates are presented for two major tax categories in Poland: value added tax, and employer and employee social contributions for the 1999-2013 period. Our results indicate that long-run elasticities are close to unity. An analysis of short-run
more » ... of short-run elasticities based on considering their asymmetric responses to economic fluctuations, complemented by a rolling regression exercise, suggests that VAT revenues are subject to greater volatility. Therefore, a shift in taxation from labor income to consumption increases the sensitivity of public finances to the business cycle.
doi:10.33119/gn/100888 fatcat:fkbssxomgzgphazr6bxqvjtvg4