Table 9: Impact of a 10% permanent and temporary reduction in earned income taxes for workers aged 60 funded through a lump-sum tax, key macroeconomic indicators*.

Macroeconomic indicatorsPermanentTemporary
201020302050201020302050

Real GDP per capita0.17 (0.09)0.19 (0.14)0.21 (0.11)0.18 (0.10)0.36 (0.16)0.09 (0.02)
Labour supply/capita0.27 (0.14)0.34 (0.16)0.42 (0.12)0.27 (0.15)0.41 (0.17)0.06 (0.01)
National savings−0.24 (−0.05)0.16 (0.31)−0.23 (0.02)−0.27 (−0.08)0.18 (−0.03)0.15 (0.00)
Capital stock/capita−0.03 (−0.02)−0.17 (0.15)−0.41 (0.06)−0.06 (−0.03)0.20 (0.12)0.21 (0.05)
Capital/labour ratio−0.33 (−0.17)−0.32 (−0.11)−0.01 (−0.10)−0.35 (−0.19)−0.30 (−0.09)0.09 (0.03)
Real wages−0.10 (−0.05)−0.11 (−0.03)−0.14 (−0.03)−0.10 (−0.05)−0.04 (−0.02)0.04 (0.01)

*Percentage point difference against the reference scenario. Values in brackets are differences compared to the scenarios in which the tax reduction is financed through increases in the earned income tax rate for worker under the age of 60.