Progetto di ricerca
Microsimulation Modelling as a Tool for the Study of Income Sources Exempt from Progressive Taxation
The Italian tax-benefit system is characterised by a growing number of exemptions from progressive taxation. Several income sources previously subject to PIT are now taxed at a proportional tax rate or tax free. This phenomenon has led to a weakening of the redistributive capacity of the tax system as a whole. By means of tax microsimulation techinques, the following study first quantifies within a counterfactual logic the redistributive effect associated with the erosion of the PIT base. The analysis is then broadened by investigating the relative contribution given by each tax-benefit instrument to the overall redistributive effect in the Italian contest over the period 2005-2018. The features of a new static microsimulation model, called IT-EXEMPT, will be also discussed. A further objective of the research is to present a Gini-based decomposition approach able to isolate the redistributive effect of a single tax-benefit change from all remaining changes over two different tax periods, whatever is the nature of the other changes occured (tax-benefit changes, market income changes and demographic shifts). An application of the latter method will be provided with regard to the introduction of the alternative tax regime on rental income from residential property, the so-called cedolare secca.