04877oam 22010814 450 991078834420332120230721045618.01-4623-4368-61-4527-1376-61-4518-7085-X97866128417811-282-84178-5(CKB)3170000000055130(EBL)1608038(SSID)ssj0000943287(PQKBManifestationID)11584500(PQKBTitleCode)TC0000943287(PQKBWorkID)10978109(PQKB)11231071(OCoLC)762701230(MiAaPQ)EBC1608038(IMF)WPIEE2008227(EXLCZ)99317000000005513020020129d2008 uf 0engur|n|---|||||txtccrTax Reforms, “Free Lunches”, and “Cheap Lunches” in Open Economies /Juha Tervala, Giovanni GanelliWashington, D.C. :International Monetary Fund,2008.1 online resource (32 p.)IMF Working PapersIMF working paper ;WP/08/227Description based upon print version of record.1-4519-1538-1 Includes bibliographical references.Contents; I. Introduction; II. The Model; A. Households; B. The Government; C. Firms; D. The Initial Steady State; III. Parameterization; IV. The Domestic and International Effects of a Cut in the Income Tax Rate; A. The Impact on the Domestic Economy; B. The International Effects; V. Consumption Tax Cuts; VI. A Revenue Neutral Tax Reform; VII. Sensitivity Analysis; VII. Conclusions; Appendix; ReferencesThis paper focuses on the macroeconomic and budgetary impact of tax reforms in a New Keynesian two-country model. Our results show that both income and consumption unilateral tax rate reductions do not constitute a "free lunch", in the sense that they have negative budgetary consequences for the country which implements them. In addition, the degree of self-financing implied by our model is in the 8½-24 percent range. Since the degree of self-financing estimated in previous literature was larger, we conclude that in our model not only the "lunch" is not "free", but is also not that "cheap". A comparison of alternative (income-tax versus consumption-tax based) fiscal stimulus packages shows that consumption tax cuts imply a larger short-run impact on domestic output but the income tax cuts stimulate the domestic economy more in the long run. We also look at the implications of a revenue-neutral tax reform in which consumption taxes are increased to compensate for lower income tax collection.IMF Working Papers; Working Paper ;No. 2008/227TaxationEconometric modelsPublic welfareEconometric modelsMacroeconomicsimfPublic FinanceimfTaxationimfBusiness Taxes and SubsidiesimfPersonal Income and Other Nonbusiness Taxes and SubsidiesimfTaxation, Subsidies, and Revenue: GeneralimfMacroeconomics: ConsumptionimfSavingimfWealthimfPublic finance & taxationimfConsumption taxesimfIncome and capital gains taxesimfRevenue administrationimfConsumptionimfTax collectionimfSpendings taximfIncome taximfRevenueimfEconomicsimfTax administration and procedureimfUnited StatesimfTaxationEconometric models.Public welfareEconometric models.MacroeconomicsPublic FinanceTaxationBusiness Taxes and SubsidiesPersonal Income and Other Nonbusiness Taxes and SubsidiesTaxation, Subsidies, and Revenue: GeneralMacroeconomics: ConsumptionSavingWealthPublic finance & taxationConsumption taxesIncome and capital gains taxesRevenue administrationConsumptionTax collectionSpendings taxIncome taxRevenueEconomicsTax administration and procedure336.2Tervala Juha1493493Ganelli Giovanni1092052DcWaIMFBOOK9910788344203321Tax Reforms, “Free Lunches”, and “Cheap Lunches” in Open Economies3716493UNINA