Welfare effects of Distortionary Fringe Benefits Taxation: The Case of Employer-provided cars

Time: 2011, Thursday June 16, 13.00-14.00 hours
Location: CPB-office, Van Stolkweg 14, The Hague

Presentation: Jos van Ommeren (VU University Amsterdam)

Discussants: Jan Takens (Ministry of Finance)

Language: Dutch

Registration:  Please register by sending an email to polinars@cpb.nl.

Abstract subject: In Europe, many employees receive company cars as fringe benefits induced by taxation. We analyse the welfare effects of company car taxation for the Netherlands by estimating to what extent car expenditure and private car travel change when employees receive a company car. Tax treatment of company cars generates a welfare loss ranging from €600 to €780 per year per company car , mainly due to a shift towards more expensive cars (from €420 to €600 per year), but also due to increased private travel (€180 per year). For the whole of Europe, we estimate the welfare deadweight loss to be about €12 billion per year.

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