Tax Reform of the Century—the Swedish Experiment

What can changes in tax structure accomplish? The Swedish tax reform of 1991 is the most far-reaching reform in any industrialized country in the postwar period. It represents a thorough application of a strategy of rate cuts cum base broadening, and it has affected a myriad of economic incentives in a more or less substantial way. This paper reviews the lessons from a major evaluation effort, sponsored by the Swedish government and involving a large number of researchers.