Effects of the Introduction of "Familienbonus" and "Kindermehrbetrag", the New Tax Relief for Families in Austria. A Microsimulation Study

This paper analyses the effects of the introduction of the tax relief for families "Familienbonus" and "Kindermehrbetrag" on household income in Austria, using the microsimulation model WIFO-Micromod that is based on the EU-SILC data. The average yearly equivalised household income increases by 184 €, which corresponds to a relative increase of 0.8 percent. For the families concerned, the reform leads to an increase in the corresponding income by 635 € or 2.7 percent and to a reduction in the average yearly income tax burden by 1,416 €. The effects are most pronounced in the medium range of the household income distribution. The total personal income tax revenue decreases by 1.6 billion € per year.