Effects of the Austrian Income Tax Reform 2015/2016 on Private Consumption: Survey Findings

Kronberger, Ralf and Schmid, Christoph (2018) Effects of the Austrian Income Tax Reform 2015/2016 on Private Consumption: Survey Findings. Department of Economics Working Paper Series, 275. WU Vienna University of Economics and Business, Vienna.

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Abstract

We use survey findings to analyse the effects of the Austrian income tax reform 2015/2016 on private consumption differentiated by income classes. Using survey data, we also estimate the corresponding average marginal propensities to consume and compare them to applied average marginal propensities to consume in economic models used to analyse the previous two income tax reforms in Austria. The estimated average marginal propensity to consume amounts to approximately 0.46, whereby in tendency increasing from the lowest income class (0.42-0.43) to the highest income class (0.48-0.50). Our estimated average marginal propensity to consume across all income classes basically corresponds to those used in economic models to evaluate the income tax reform 2015/2016. However, our estimated marginal propensities to consume by income classes fundamentally differ from those used in the economic models.

Item Type: Paper
Keywords: income tax reform, private consumption response, marginal propensity to consume, survey methodology
Classification Codes: JEL E62, H24, H31
Divisions: Departments > Volkswirtschaft
Depositing User: Claudia Tering-Raunig
Date Deposited: 10 Jan 2019 07:39
Last Modified: 22 Oct 2019 00:41
URI: https://epub.wu.ac.at/id/eprint/6769

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