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A Tax-Benefit Microsimulation Model for Personal Income Taxation in Italy

Author

Listed:
  • Elena Miola

    (Ministry of Economy and Finance)

  • Marco Manzo

    (Ministry of Economy and Finance)

Abstract
The paper presents a static tax-benefit microsimulation model developed by combining the IT-SILC 2016 dataset, a survey on Italian incomes and living conditions, and administrative tax return micro data in the same year. The dataset derives from the exact matching of survey and administrative data. The microsimulation model reproduces in detail the features of Italian personal income tax and benefit system and is aimed at evaluating tax revenue and fiscal policies distributive impact. Redistribution analysis is carried out by using concentration, progressivity and redistribution indices for individual taxpayers and equivalent households. Inequality issues are analysed further through the computation of decile and quintile distribution of household gross and disposable income, by using the tax-benefit microsimulation model.

Suggested Citation

  • Elena Miola & Marco Manzo, 2021. "A Tax-Benefit Microsimulation Model for Personal Income Taxation in Italy," Working Papers wp2021-10, Ministry of Economy and Finance, Department of Finance.
    • Handle: RePEc:ahg:wpaper:wp2021-10
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    File URL: https://www.finanze.gov.it/export/sites/finanze/.galleries/Documenti/Varie/WP_A-tax-benefit-microsimulation-model-for-PIT-in-Italy_final1.pdf
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    References listed on IDEAS

    as
    1. Fernando Di Nicola & Giorgio Mongelli & Simone Pellegrino, 2015. "The static microsimulation model of the Italian Department of Finance: Structure and first results regarding income and housing taxation," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2015(2), pages 125-157.
    2. Paolo Caro, 2020. "Decomposing Personal Income Tax Redistribution with Application to Italy," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(1), pages 113-129, March.
    3. Valentinova Tasseva, Iva & De Agostini, Paola & Paulus, Alari, 2016. "The effect of changes in tax-benefit policies on the income distribution in 2008-2015," EUROMOD Working Papers EM6/16, EUROMOD at the Institute for Social and Economic Research.
    4. Olivier Bargain, 2017. "Welfare analysis and redistributive policies," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(4), pages 393-419, December.
    5. Andrea Albarea & Michele Bernasconi & Cinzia Di Novi & Anna Marenzi & Dino Rizzi & Francesca Zantomio, 2015. "Accounting for Tax Evasion Profiles and Tax Expenditures in Microsimulation Modelling. The BETAMOD Model for Personal Income Taxes in Italy," International Journal of Microsimulation, International Microsimulation Association, vol. 8(3), pages 99-136.
    6. Nicola Curci & Marco Savegnago & Marika Cioffi, 2017. "BIMic: the Bank of Italy microsimulation model for the Italian tax and benefit system," Questioni di Economia e Finanza (Occasional Papers) 394, Bank of Italy, Economic Research and International Relations Area.
    7. Davide Azzolini & Martina Bazzoli & Silvia De Poli & Carlo Fiorio & Samuele Poy, 2017. "Developing and Validating Regional Microsimulation Models. TREMOD: The Tax-Benefit Model of the Italian Province of Trento," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2017(1), pages 5-33.
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    Citations

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    Cited by:

    1. Dalila De Rosa & Gloria Di Caprera & Francesco Figari & Carlo Fiorio & Pasquale Giacobbe & Marco Manzo & Elena Miola & Giorgio Mongelli & Chiara Subrizi, 2023. "L’Assegno Unico e Universale e la revisione dell’IRPEF nel 2022: un’analisi di equità ed efficienza per famiglie di lavoratori dipendenti," Working Papers wp2023-19, Ministry of Economy and Finance, Department of Finance.
    2. Wynnona Steyn & Alexius Sithole & Winile Ngobeni & Eva Muwanga-Zake & Helen Barnes & Michael Noble & David McLennan & Gemma Wright & Katrin Gasior, 2021. "Simulating personal income tax in South Africa using administrative data and survey data: A comparison of PITMOD and SAMOD for tax year 2018," WIDER Working Paper Series wp-2021-120, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    tax-benefit microsimulation model; personal income taxation; redistribution; inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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