Tax Incidence and (Re)Distribution
While countries are constantly trying to adjust their tax systems to achieve efficient taxation and sufficient tax revenue, the success of these reforms clearly depends on the induced behavioral responses of the taxed economic agents. The behavioral responses of firms and individuals, in return, affect the efficiency of taxation as well as distributive issues within and between countries. We use state-of-the-art methods and data to study behavioral responses to taxation and ultimately the incidence of various taxes. Tax policy always has distributional implications. Research in this pillar also studies the direct distributional effects and derives conclusions for a ‘fair’ tax system.