Tax rates of simulated tax cuts are obtained according to equation (3). For both income
bases, we use parameters a, b, c instead of ρiL , σiL, ρjK , σjK for simplicity. As explained in
Section 2, parameters a and g represent the tax cut as a percentage of the initial fiscal
revenue (10%) and average tax rates calculated as the ratio between gross-tax liabilities
and taxable income, respectively. Parameters c and b are obtained multiplying a by g and
g/(1 - g) respectively. The average tax rate on capital income gK is calculated before a
1, 500e allowance for dividends is applied.
The distribution impact of neutral-revenue tax cuts is measured either globally or locally
at a particular point of the income distribution. Table 2 summarizes the global effect of the
different tax cuts on total revenue, liability progression and income redistribution.

The first column of the Table 2 includes the initial revenue obtained by the microsimu-
lation model and the revenue figures simulated for the three tax cuts. Loss-revenue under
the three tax cuts accounts for approximately 10.50% of the gross-tax liability, instead of
the simulated 10% tax cut. The half point percent of discrepancy between these figures is
mainly due to the initial tax rate applied to the ‘saving base’, 17.27%, which is lower than
13Parameter η represents the tax-elasticity coefficient obtained by simulating an 1% increase on the pre-tax
income components of each tax-payer. Taxable-income elasticity is estimated as 1.33643 * Simulated Gross
Tax Liability after 1% pre-tax income increased.
21
More intriguing information
1. Developmental changes in the theta response system: a single sweep analysis2. Estimating the Technology of Cognitive and Noncognitive Skill Formation
3. Short- and long-term experience in pulmonary vein segmental ostial ablation for paroxysmal atrial fibrillation*
4. ADJUSTMENT TO GLOBALISATION: A STUDY OF THE FOOTWEAR INDUSTRY IN EUROPE
5. The name is absent
6. Neighborhood Effects, Public Housing and Unemployment in France
7. The name is absent
8. Developing vocational practice in the jewelry sector through the incubation of a new ‘project-object’
9. Skills, Partnerships and Tenancy in Sri Lankan Rice Farms
10. The name is absent