Sommacal, A. (2020).

Flat tax reforms in Italy. Univeristà di Verona.

Abstract:

We calibrate and simulate an heterogeneous agents OLG model to assess the impact of several reforms in which the personal income tax in Italy is replaced by a flat tax possibly complemented with a deduction. We find that a flat tax is welfare improving (according to a utilitarian social welfare function) only for specific subgroups of the population and for low values of the deduction.