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Esteban García-Miralles

@estebangmiralles.bsky.social

Economist at Bank of Spain (personal views) | Public Finance, Labor, Metrics | Previously theIFS, uni_copenhagen, UCSD, complutense. https://sites.google.com/view/esteban-garcia-miralles

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Esteban García-Miralles@estebangmiralles.bsky.social · 5mo ago

Our paper is now published in the European Economic Review, and our findings are summarized in this column. Rewarding joint work with 32 other fiscal experts!

VoxEU @ CEPR@voxeu.org · 5mo ago

Data from 21 European countries show the progressivity of personal income tax systems gives rise to large tax-to-base elasticities, implying substantial potential for fiscal drag @mathiasdolls.bsky.social, M Freier, @estebangmiralles.bsky.social, A Mazzon, S Riscado cepr.org/voxeu/column... #EconSky

Description of the figure: Comparing actual 2023 revenues against counterfactual scenarios in which the 2019 system had been kept unchanged or fully indexed shows that governments limited fiscal drag to varying degrees. The 2022 inflationary spike in Europe has brought renewed interest in fiscal drag. Using harmonised microdata for 21 European countries, this column documents that the progressivity of personal income tax systems gives rise to large tax‑to‑base elasticities, implying substantial potential for fiscal drag if parameters are not adjusted. These effects are more prevalent for labour income and for taxpayers at the bottom and middle of the income distribution. Furthermore, it documents very heterogeneous policy responses across countries over 2019–2023, ranging from incomplete offsetting to over‑compensation of potential fiscal drag.