Equity and Efficiency Aspects of a Reform of Belgian Indirect Taxes

Decoster A. en Schokkaert E. (1989) Equity and Efficiency Aspects of a Reform of Belgian Indirect Taxes, Recherches Economiques de Louvain, 55(2),155-176.
ABSTRACT
In this paper we apply the theory of tax reform to derive empirical results about the structure of indirect taxes in Belgium. We focus on the equity-efficiency trade-off and try to formulate conclusions which are relevant for policy makers. To integrate the merit good component in the indirect taxes on tobacco and transportation, we compute the implicit valuation attached to them by policy makers. This component is considerable and affects the whole structure of tax rates.