Philippe Liégeois - Dealing with Cross-borders in a Tax-benefit Model for Luxembourg

  • Presenting author: Philippe Liégeois (LISER (Luxembourg Institute of Socio-Economic Research))

  • Authors: Philippe Liégeois

  • Session: B02B - Public Choice [1] - Tuesday 11:00-12:30 - Marietta-Blau Hall

The main objective of this project is to analyze the impact of changes in social contributions and direct taxes on the distribution of net income (well-being) and total receipts for Luxembourg. The analysis aims at concentrating on the resident population with regard to the distributional effects, with an innovative extension to “cross-borders”, at least for total receipts. Given the distributional contents of the analysis, and the examination of alternative policies, the study must build on (static) microsimulation. Tools and data are presently available for residents already (mainly EUROMOD and EU-SILC), but not for cross-borders, hence a need for a secondary simulation framework based on EUROMOD and HFCS data (offering some rough information for cross-borders on top). The general strategy is to perform the main simulations for residents through EUROMOD/SILC, on the one side, and for residents and cross-borders (separately) through EUROMOD/HFCS, on the other side. The latter approach is aiming to generate total outcomes for cross-borders in terms of totals for residents. Those macro coefficients are then be applied downstream to figures arising from EUROMOD/SILC for residents for deriving overall total impacts.