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

Ralf Kronberger, Christoph Schmid

Publication: Working/Discussion PaperWU Working Paper

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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.
Original languageEnglish
Place of PublicationVienna
PublisherWU Vienna University of Economics and Business
DOIs
Publication statusPublished - 1 Dec 2018

Publication series

SeriesDepartment of Economics Working Paper Series
Number275

WU Working Paper Series

  • Department of Economics Working Paper Series

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