Developing a static microsimulation model for the analysis of housing taxation in Italy

S Pellegrino, M Piacenza, G Turati - The International Journal of …, 2011 - iris.unito.it
The International Journal of Microsimulation, 2011iris.unito.it
In this paper we develop the first (static) microsimulation model aimed at studying the
distributive impact of housing taxation on Italian households. We use as input data those
provided by the Bank of Italy from its Survey on Households Income and Wealth, and
discuss specific problems arising in the evaluation of cadastral income and of the Property
Tax base. Our estimates of the distribution of taxpayers are very close to the Ministry of
Finance official statistics; hence, our model can be seen as a reliable tool to evaluate the …
In this paper we develop the first (static) microsimulation model aimed at studying the distributive impact of housing taxation on Italian households. We use as input data those provided by the Bank of Italy from its Survey on Households Income and Wealth, and discuss specific problems arising in the evaluation of cadastral income and of the Property Tax base. Our estimates of the distribution of taxpayers are very close to the Ministry of Finance official statistics; hence, our model can be seen as a reliable tool to evaluate the current distribution of housing taxation and the impact of potential tax reforms. Our simulations suggest that both Property Tax and Waste Management Tax show a moderate regressive impact with respect to household gross income, whilst the Personal Income Tax on dwellings other than the main residence is progressive. We then provide an application of our model, to study the Property Tax reform in 2008. Our findings show that all households owning the main residence gain from the 2008 reform, but tax cuts are mostly concentrated on the top three deciles of household equivalent gross income, so that the richest benefit most.
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