04931oam 22011054 450 991081096670332120200520144314.01-4623-4368-61-4527-1376-61-4518-7085-X97866128417811-282-84178-5(CKB)3170000000055130(EBL)1608038(SSID)ssj0000943287(PQKBManifestationID)11584500(PQKBTitleCode)TC0000943287(PQKBWorkID)10978109(PQKB)11231071(OCoLC)762701230(IMF)WPIEE2008227(MiAaPQ)EBC1608038(IMF)WPIEA2008227(EXLCZ)99317000000005513020020129d2008 uf 0engur|n|---|||||txtccrTax Reforms, “Free Lunches”, and “Cheap Lunches” in Open Economies /Juha Tervala, Giovanni Ganelli1st ed.Washington, 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 modelsBusiness Taxes and SubsidiesimfConsumption taxesimfConsumptionimfEconomicsimfIncome and capital gains taxesimfIncome taximfMacroeconomicsimfMacroeconomics: ConsumptionimfPersonal Income and Other Nonbusiness Taxes and SubsidiesimfPublic finance & taxationimfPublic FinanceimfRevenue administrationimfRevenueimfSavingimfSpendings taximfTax administration and procedureimfTax collectionimfTaxationimfTaxation, Subsidies, and Revenue: GeneralimfWealthimfUnited StatesimfTaxationEconometric models.Public welfareEconometric models.Business Taxes and SubsidiesConsumption taxesConsumptionEconomicsIncome and capital gains taxesIncome taxMacroeconomicsMacroeconomics: ConsumptionPersonal Income and Other Nonbusiness Taxes and SubsidiesPublic finance & taxationPublic FinanceRevenue administrationRevenueSavingSpendings taxTax administration and procedureTax collectionTaxationTaxation, Subsidies, and Revenue: GeneralWealth336.2Tervala Juha1693108Ganelli Giovanni1092052DcWaIMFBOOK9910810966703321Tax Reforms, “Free Lunches”, and “Cheap Lunches” in Open Economies4070682UNINA