1. a proposal for a socially conscious flat rate tax
23 June 2010
23 June 2010
Flat but fair:
a proposal for a socially conscious flat rate tax
CES

2. Structure of the presentation
23 June 2010
Structure of the presentation
Introduction
The Dutch system in detail
The proposal
The effects
Conclusions and further discussions

3. Dutch marginal tariff is already flat
23 June 2010
23 June 2010
Dutch marginal tariff is already flat
CES

4. The proposal A flat rate income tax of 33.25%.
23 June 2010
The proposal
A flat rate income tax of 33.25%.
Altering the regressive income-dependent health care contribution, so that it applies to all wages.
Adding an extra surcharge of 5% to 10% to top incomes above €125,000.
Budget neutrality by shifting from income taxes to value added taxes.

5. A flat health care contribution as well
23 June 2010
A flat health care contribution as well

6. Room for raising VAT rates
23 June 2010
Room for raising VAT rates

7. The income effects are rather small
23 June 2010
The income effects are rather small

8. 23 June 2010
Labor market effects
Labor supply expand (1.0 %) and unemployment rates fall slightly (-0.1%).
Employment for lower incomes decreases
(-0.4 %), for higher income increases (1.9 %).
Production increases by 1.0%.
A flat rate positively increases investment in training and higher education.

9. Conclusions and discussions
23 June 2010
23 June 2010
Conclusions and discussions
A well-designed flat rate leads to a better functioning labor market.
A well-designed flat rate reduces red tape.
Progressivity can be achieved by other means.
A single flat rate for the VAT as well.
CES