The Effect of Labor’s Tax as a Part of the General Policies According to General Policies of Iran on the Wealthy and Poor Households’ Welfare

Document Type : Research/Original/Regular Article

Authors

1 Assistant Professor, Department of Economics, Faculty of Management and Humanities, Chabahar Maritime University, Chabahar, Iran

2 Assistant Professor, Department of Economics, Faculty of Management and Humanities, Chabahar Maritime University,Chabahar, Iran

Abstract

The aim of this study is to analyze the impact of labor’s tax policy on the situation of poor and wealthy families in efficient financial policy model within the DSGE framework from 1998 to 2020. The tax change of the labor force and the role of poor and wealthy family can change the results of the efficient policies in economy, and implement new policies. The results indicated that in such models, the role of labor’s tax plays a significant role in policy making, and the policy of tax change on labor force makes a difference on the welfare of the poor and wealthy families. Therefore, improving the monetary and financial policies of government should consider the welfare of the poor and rich families. The analysis of tax reforms by government through Ramzi problem in poor and wealthy families showed that the execution of increasing tax on labor force by the government can lead to welfare reduction in the short term and its increase in the long term.

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