Employers' evaluation of the Dutch tax reform

Abstract

The Dutch tax reform that became effective on January 1, 1990 had two goals: simplification and rate reduction. Although the target group of the reform was the individual taxpayer, employers were also affected by it since employers have to withhold income tax and social security premiums from the wages of their employees, and because they are often taxpayers as well. By means of longitudinal panel research, employers' evaluation of the tax reform was studied. In this paper the effects of individual, organizational and environmental factors on the evaluation of the tax reform is examined. Results show that the legal form of organizations is responsible for differences in evaluation of the tax reform: corporations reacted more negatively than business income taxpayers who in turn were more negative than non-profit making organizations.