Author Description

How to finance a large public sector in ways that are equitable and not-too-harmful to economic incentives are crucial policy issues in many European countries. This book reviews the lessons from the Swedish tax reform of 1991, the most far-reaching tax reform in any western industrialized country in the post-war period. According to its architects, the reform would avoid the classical goal conflict between efficiency and income redistribution. Because of a generally more efficient economy, all strata in society should gain. At the same time the revenue gains from broader tax bases were to make up for losses from drastic rate cuts -- the Swedish tax take should remain the highest in the world. The authors discuss a range of behavioral responses (including tax planning, savings, labor supply, investment, etc.), and seek to identify areas where tax structure matters and equity, and draw lessons for tax reform more generally. The book will be of interest to anyone with an interest in tax policy and tax reform evaluation.