Forecasting the Finnish tax reform

The project widens the impact assessments of taxation to the tax system. The clearest lack of knowledge is the empirical literature’s focus on the short-term effects of marginal taxes (forgetting the longer-term, broader effects. With the help of research, it is possible to take a new stance on the incentive effects of taxation in both low- and high-income households.

The research consists of two research packages.

1. How big is the tax incentive problem and what should be done about it in light of previous literature?
2. The long-term effects of taxation using the macroeconomic life cycle model.

Macroeconomic researchers from the Bank of Finland and the University of Turku are also involved in the research.