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Tax and benefit systems

The functioning of labour markets, and taxation and benefit systems are major aspects of economic policy. Globalisation, the increasing mobility of factors such as capital and goods, ageing populations and the financing of welfare systems, set new challenges for these policies.

DG ECFIN analyses tax and benefit systems from the point of view of how they contribute to economic growth and higher employment, while safeguarding fair social protection. Particular interest is devoted to the issues of making work pay, how to finance welfare states, and how to implement tax and benefits systems that are conducive to growth and employment.

DG ECFIN's analyses and studies on tax and benefit systems cover several important areas, such as:

  • The effects of taxes and benefits on household incomes for different types of households at different earnings levels, as well as incentive structures in tax and benefit systems, including benefit duration, eligibility for benefits and availability for jobs;
  • Micro-simulation models to analyse the effects of fiscal and social policy instruments;
  • Recent trends in the levels and structure of tax revenues and benefit expenditures;
  • Main features and effects of Member State reforms in labour, capital and consumption taxation;
  • Challenges from an ageing population and globalisation.

DG ECFIN's work includes analytical reports and publications as well as notes to the Economic and Financial Committee and the Economic Policy Committee and its various working groups, briefings, speeches and other inputs to DG ECFIN and the Commission's work in general. In particular, the outputs feed into social and fiscal policy debates in the EU and to the assessments and recommendations in various coordination processes such as the Lisbon Strategy for growth and jobs, the Stability and Growth Pact and the Open method of coordination.

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