The effect of corporate income tax on the welfare of households with the CGE approach (Case study: Iran's economy)

Esmailpour, Aso; Karimi Takanlou, Zahra; Shahmoradi, Asrin

doi:10.22034/jepr.2023.62730

Document Type : Original Article

Authors

¹ PhD Student in Monetary Economics, Department of Economics, Faculty of Economics and Management, Tabriz University, Tabriz, Iran

² Associate Professor in Economics, Department of Economics, Faculty of Economics and Management, Tabriz University, Tabriz, Iran

³ PhD Student in Islamic Economics, Department of Economics, Faculty of Economics and Management, Tabriz University, Tabriz, Iran

https://doi.org/10.22034/jepr.2023.62730

Abstract

Taxes are one of the most important financial policy tools and can help the government to ensure people's welfare. Therefore, in this study, the effect of increasing and decreasing corporate income tax on the welfare of urban and rural households has been investigated. To investigate the impact of the mentioned tax changes on the welfare of households at the macro level, the method of the standard calculable general equilibrium model has been used. To estimate the general balance model, the social accounting matrix of Iran 2013 was used. The model has been solved using GAMS software in two scenarios that include increasing and decreasing corporate taxes. In order to check the welfare of the household, the index of equivalent changes has been used. The findings indicate that in the first scenario, with the application of 10, 20 and 50 percent increase in corporate tax, the welfare of urban households decreases, but the welfare of rural households increases slightly.The welfare of all households decreases in these scenarios. In the second scenario, with the reduction of this tax in the previous three cases, the welfare of the urban household increases and the rural household experiences a slight decrease in welfare,

Keywords

Main Subjects

Public Sector Economics

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Economic Policies and Research

The effect of corporate income tax on the welfare of households with the CGE approach (Case study: Iran's economy)

References

References

Volume 2, Issue 1 - Serial Number 5
April 2023
Pages 36-62

The effect of corporate income tax on the welfare of households with the CGE approach (Case study: Iran's economy)

References

References

Volume 2, Issue 1 - Serial Number 5April 2023Pages 36-62

Volume 2, Issue 1 - Serial Number 5
April 2023
Pages 36-62