An evaluation strategy for answering the question, “Is the tax schedule more redistributive after a reform than prior to a reform?” is presented. The procedure builds upon addressing measures of tax redistribution, utilizing micro data from periods before and after the reform. Tax redistributional effects are measured in terms of a “common base” approach, which means that a benchmark is established which facilitates identifying how the redistributional efforts of policy makers develop over time. When applying this method for evaluation of the 2006 Norwegian tax reform, the results suggest that the modification of the dual income tax system of the 2006 reform has improved the redistributional effect of the schedule. This conclusion is qualified by addressing measurement challenges brought up by the reform, such as behavioral responses and timing effects.
AarbuKarl O.ThoresenThor O.. 2001. “Income Responses to Tax Changes—Evidence from the Norwegian Tax Reform.”National Tax Journal54:319–35.
2.
AasnessJørgenDagsvikJohn K.ThoresenThor O.. 2007. “The Norwegian Tax-benefit Model System LOTTE.” In Modelling Our Future: Population Ageing, Health and Aged Care, International Symposia in Economic Theory and Econometrics, edited by GuptaAnilHardingAnn, 513–18. Amsterdam: Elsevier Science, North-Holland.
3.
AlstadsæterAnnetteFjærliErik. 2009. “Neutral Taxation of Shareholder Income? Corporate Responses to an Announced Dividend Tax.”International Tax and Public Finance16:571–604.
4.
BanksJamesDiamondPeter. 2010. “The Base for Direct Taxation.” In Dimensions of Tax Design: the Mirrlees Review, edited by MirrleesJamesAdamStuartBesleyTimothyBlundellRichardBondStephenChoteRobertGammieMalcolmJohnsonPaulMylesGarethPoterbaJames, 548–648. Oxford, UK: Oxford University Press.
5.
BargainOlivierCallanTim. 2010. “Analysing the Effects of Tax-Benefit Reforms on Income Distribution: A Decomposition Approach.”Journal of Economic Inequality8:1–21.
6.
BishopJohn A.Victor ChowK.FormbyJohn P.HoChih-C.. 1997. “Did Tax Reform Reduce Actual US Progressivity? Evidence from the Taxpayer Compliance Measurement Program.”International Tax and Public Finance4:177–97.
7.
BlauFrancine D.KahnLawrence W.. 2007. “Changes in the Labor Supply Behavior of Married Women: 1980–2000.”Journal of Labor Economics25:393–438.
8.
BlundellRichardMaCurdyThomasMeghirCostas. 2007. “Labor Supply Models: Unobserved Heterogeneity, Nonparticipation and Dynamics.” In Handbook of Econometrics, Vol. 6A, edited by HeckmanJames J.LeamerEdward E., 4667–775. Amsterdam, Netherlands: Elsevier.
9.
BoadwayRobin. 2004. “The Dual Income Tax System—An Overview.”CESifo DICE Report2:3–8.
10.
BøErlend E.LambertPeter J.ThoresenThor O.. Forthcoming. “Horizontal Inequity under a Dual Income Tax System: Principles and Measurement.”International Tax and Public Finance.
11.
ClarkTomLeicesterAndrew. 2004. “Inequality and Two Decades of British Tax and Benefit Reforms.”Fiscal Studies25:129–58.
12.
CnossenSijbren. 2000. “Taxing Capital Income in the Nordic Countries: A Model for the European Union?” In Taxing Capital Income in the European Union–Issues and Options for Reform, edited by CnossenSijbren, 180–213. Oxford, UK: Oxford University Press.
13.
CreedyJohn. 1996. Fiscal Policy and Social Welfare. Cheltenham, UK: Edward Elgar.
14.
CreedyJohn, 2003. “Non-Uniform Consumption Taxes: A ‘Blunt Redistributive Instrument’?” In Fiscal Policy, Inequality and Welfare, Research on Economic Inequality, Vol. 10, edited by AmielYoramBishopJohn A., 1–19. Amsterdam: Elsevier.
15.
DagsvikJohn K.JiaZhiyang. 2010. “Labor Supply as a Choice among Latent Job Opportunities: A Practical Empirical Approach.”Revised version of Discussion Papers 550, Statistics Norway, Oslo, Norway.
16.
DagsvikJohn K.KarlstrømAnders. 2005. “Compensating Variation and Hicksian Choice Probabilities in Random Utility Models that are Nonlinear in Income.”Review of Economic Studies72:57–76.
17.
DardanoniValentinoLambertPeter J.. 2002. “Progressivity Comparisons.”Journal of Public Economics86:99–122.
18.
EbertUdo. 1997. “Social Welfare when Needs Differ: An Axiomatic Approach.”Economica64:233–44.
19.
ElmendorfDouglas W.FurmanJasonGaleWilliam G.HarrisBenjamin H.. 2008. “Distributional Effects of the 2001 and 2003 Tax Cuts: How Do Financing and Behavioral Responses Matter.”National Tax Journal61:365–80.
20.
FeldsteinMartin. 1995. “The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act.”Journal of Political Economy103:551–72.
21.
FjærliErikRaknerudArvid. 2009. “The Investment and Financing Decisions of Closely Held Firms when there is a Tax on the Equity Premium.”Discussion Papers 594, Statistics Norway, Oslo, Norway.
22.
FrickJoachim R.GoebelJanGrabkaMarkus M.. 2007. “Assessing the Distributional Impact of ‘Imputed Rent’ and ‘Non-Cash Employee Income’ in Micro Data, Comparative EU statistics on Income and Living Conditions: Issues and Challenges.”Eurostat Methodologies and Working Papers, Eurostat, Luxembourg.
23.
GenserBerndReutterAndreas. 2007. “Mowing Towards Dual Income Taxation in Europe.”FinanzArchiv: Public Finance Analysis63:436–56.
24.
GordonRoger H.SlemrodJoel B.. 2000. “Are ‘Real’ Responses to Taxes Simply Income Shifting between Corporate and Personal Tax Bases?” In Does Atlas Shrug, edited by SlemrodJoel B., 240–80. New York: Russell Sage.
25.
JenkinsStephen. 1995. “Accounting for Inequality Trends: Decomposition Analyses for the UK, 1971–86.”Economica62:29–63.
26.
JohnsAndrewSlemrodJoel B.. 2010. “The Distribution of Income Tax Compliance.”National Tax Journal63:397–418.
27.
KalbGuyonneThoresenThor O.. 2010. “A Comparison of Family Policy Designs of Australia and Norway Using Microsimulation Models.”Review of Economics of the Household8:255–87.
28.
KaplowLouisShavellSteven. 2002. Fairness versus Welfare. Cambridge, MA: Harvard University Press.
29.
KariSeppoKarikallioHannaPirttiläJukka. 2009. “The Impact of Dividend Taxation on Dividends and Investment: New Evidence Based on a Natural Experiment.”CESifo Working Paper No. 2756, Munich, Germany.
30.
KastenRichardSammartinoFrankToderEric. 1994. “Trends in Federal Tax Progressivity.” In Tax Progressivity and Income Inequality, edited by SlemrodJoel B., 9–50. Cambridge, MA: Cambridge University Press.
31.
KingMervyn A.1983. “Welfare Analysis of Tax Reforms Using Household Data.”Journal of Public Economics21:183–214.
32.
LambertPeter J.1993. The Distribution and Redistribution of Income. 2nd ed. Manchester, UK: Manchester University Press.
33.
LambertPeter J.ThoresenThor O.. 2009. “Base Independence in the Analysis of Tax Policy Effects: With an Application to Norway 1992–2004.”International Tax and Public Finance16:219–52.
34.
NygårdOdd E.ThoresenThor O.. 2009. “Fordeling av skattebyrden 1995–2006.”Appendix 5 in NOU 2009:10, 362–373. Fordelingsutvalget, Oslo, Norway.
35.
PechmanJoseph A.OknerBenjamin A.. 1974. Who Bears the Tax Burden. Washington, DC: The Brookings Institution.
36.
ReynoldsMorganSmolenskyEugene. 1977. Public Expenditures, Taxes, and the Distribution of Income: The United States, 1950, 1961, 1970. New York: Academic Press.
37.
Røed LarsenErling. 2009. “From Data to Levy Design: The Five Stages of Implementing Housing Taxes.”Discussion Papers 596, Statistics Norway, Oslo Norway.
38.
SaezEmmanuelSlemrodJoel B.GiertzSeth H.. 2009. “The Elasticity of Taxable Income with Respect to Marginal Tax Rates: a Critical Review.”NBER Working Paper No 15012, National Bureau of Economic Research, Cambridge, MA.
39.
SaundersPeterSmeedingTimothy M.CoderJohnJenkinsStephenFritzellJohanHagenaarsAldi M.HauserRichardWolfsonMichael. 1992. “Non-cash Income, Living Standards, Inequality and Poverty: Evidence from the Luxembourg Income Study.”Discussion Papers No 35, Social Policy Research Center (SPRC), The University of New South Wales, Australia.
40.
SenAmartya. 1997. “From Income Inequality to Economic Inequality.”Southern Economic Journal64:384–96.
41.
SlemrodJoel B.1992. “Do Taxes Matter? Lessons from the 1980s.”American Economic Review82:250–6.
42.
SlemrodJoel B.1995. “Income Creation or Income Shifting? Behavioral Responses to the Tax Reform Act of 1986.”American Economic Review Papers and Proceedings85:175–80.
43.
SlemrodJoel BYitzhakiShlomo. 2004. “Tax Avoidance, Evasion, and Administration.” In Handbook of Public Economics, Vol. 3, edited by AuerbachAlan J.FeldsteinMartin, 1425–70. Amsterdam: Elsevier Science, North-Holland.
44.
SørensenPeter B.1994. “From the Global Income Tax to the Dual Income Tax. Recent Tax Reforms in the Nordic Countries.”International Tax and Public Finance1:57–79.
45.
SørensenPeter B.2005. “Neutral Taxation and Shareholder Income.”International Tax and Public Finance12:777–801.
SternNicholas. 1990. “Uniformity versus Selectivity in Indirect Taxation.”Economics and Politics2:83–108.
51.
ThoresenThor O.2004. “Reduced Tax Progressivity in Norway in the Nineties. The Effect from Tax Changes.”International Tax and Public Finance11:487–506.
52.
ThoresenThor O.AlstadsæterAnnette. 2010. “Shifts in Organizational Form under a Dual Income Tax System.”FinanzArchiv66:384–418.
53.
ThoresenThor O.AasnessJørgenJiaZhiyang. 2010. “The Short-Term Ratio of Self-Financing of Tax Cuts: an Estimate for Norway’s 2006 Tax Reform.”National Tax Journal63:93–120.
54.
ThoresenThor O.ErlendE. BøFjærliErikHalvorsenElin. 2011. “Evaluating the Redistributional Effects of Tax Policy Changes: With an Application to the 2006 Norwegian Tax Reform.”Discussion Papers 648, Statistics Norway, Oslo Norway.
55.
ThoresenThor O.VattøTrine E.AarbuKarl O.. 2011. “Tax Changes and Income Responses of Wage Earners. Quasi-Experimental Evaluation and Labor Supply Model Simulation Suggest that Norwegians are Less Responsive.”Paper presented at the 67th Congress of the International Institute of Public Finance, Ann Arbor, Michigan, August 10, 2011.
