Analyzing a Flat Income Tax in the Netherlands

  title={Analyzing a Flat Income Tax in the Netherlands},
  author={Bas Jacobs and Ruud A. de Mooij and Kees Folmer},
A flat tax rate on income has gained popularity in European countries. This paper assesses the attractiveness of such a flat tax in achieving redistributive objectives with the least cost to labour market performance. We do so by using a detailed applied general equilibrium model for the Netherlands. The model is empirically grounded in the data and encompasses decisions on hours worked, labour force participation, skill formation, wage bargaining between unions and firms, matching frictions… CONTINUE READING