Prof. Laurent Simula, Ph.D.

Inequality, Taxation and Democracy in Modern Welfare States

Most European governments have implemented changes to their tax-and-transfer policies over the last three decades years. The top personal income tax rates went down on average until the big economic crisis of 2007-2009. In the early 1990s, Nordic countries introduced the “dual income tax” which systematically separates the taxation of labor income from the taxation of capital income, the latter being taxed at a lower and constant rate. Recently, several OECD countries introduced or discussed elements of dual income taxation. Others countries, especially in Central and Eastern Europe, adopted flat taxes in the 2000s or 2010s. Changes in how the tax burden is shared within the population may be detrimental to tax consent and social cohesion. The increase in real and perceived inequalities, the idea that rich households and big firms avoid high taxes, and the fear that migration would threaten national identities, are all sources of tension within European nation-states.

In this research project, Laurent Simula’s objective is to investigate to which extent the tax burden may have been shifted from the richest to middleclass households, insufficiently rich, skilled or internationally mobile to credibly threaten to vote with their feet, and insufficiently poor to benefit from national solidarity schemes.

The other research project that Mr. Simula will work on during his stay at CES –joint with Alain Trannoy (Aix-Marseille School of Economics) – will investigate the effects of productivity shocks on redistributive taxation, adopting the viewpoint of optimal income tax theory à la Mirrlees (1971).

Laurent Simula is Director of the Department of Economics at the Ecole Normale Supérieure de Lyon, where he holds a Full Professorship in Applied Microeconomics, and serves as a Scientific Advisor at the French High Council for the Evaluation of Research and Higher Education within the Department of Academic Program Evaluation. He is also an Associate Editor of the International Tax and Public Finance . Mr. Simula is affiliated with the EUTAX Observatory, located at the Paris School of Economics as well as a CESifo Research Network Fellow. He holds a PhD in Economics from EHESS in Paris and the University of Cambridge (within the European Doctoral Group in Economics) and was a postdoc at MIT and Vanderbilt University.