Policy & Press
Governments now use my work on VAT incidence when they decide whether to change VAT rates. In June 2026, when Denmark’s Finance Committee asked whether a proposed food VAT cut would reach shelf prices, the Ministry of Finance weighed our Journal of Political Economy estimates, and I answered the Committee in a memo on what the European evidence does and does not show. The Cabinet Secretariat working group on Japan’s 2027 food consumption-tax cut minuted the same estimates, along with our Argentine finding that prices end higher once a rate is restored unless increases are monitored. The Dutch Ministry of Finance’s impact analysis of its 2026 accommodation VAT increase took the asymmetry from the same paper. The Bank of Greece drew on the asymmetry and Argentine papers to put the share of a cut that reaches prices at about a fifth, the figure the Prime Minister cited in September 2026 in ruling a cut out. Sweden’s official evaluation of its 2026 food VAT cut and the European Commission’s Joint Research Centre assessment of Spain’s 2023 cut both draw on our work. The 2018 Economic Report of the President took its estimate of US tax compliance costs from mine.
Denmark, 2026 — the food VAT proposal
Denmark is preparing to abolish VAT on fruit and vegetables and halve it on the rest of the food basket, at a cost now put at 17.4 billion kroner a year. Whether a cut that size reaches shelf prices is what the Finance Committee asked the Ministry of Finance in June. Among the evidence the Ministry weighed was our Journal of Political Economy study of every VAT change in the European Union between 1996 and 2015, What Goes Up May Not Come Down.
My memo to the Committee answers from the European evidence: what pass-through looks like once the estimates are restricted to food, and to the kind of rate change Denmark is actually proposing, and what the studies the Ministry assembled do and do not establish.
Jyllands-Posten interviewed me in June 2026. TV 2 took the story up on 19 June, setting the estimates against Danske Bank’s calculation that the cut would save a household around 500 kroner a month. Jyllands-Posten interviewed me again on 6 September, after the Ministry had put eight studies to the Folketing as showing full or substantial pass-through: the memo’s reading of those studies and its food-only estimates, and the Ministry’s reply.
Japan, 2026–27 — the food consumption-tax cut
Japan will cut the consumption tax on food from 8 percent to 1 percent for two years from April 2027. I set out the case against in an interview with Nikkei on 7 July 2026, arguing that a temporary cut risks higher prices once it ends, drawing on the Finnish hairdressing experiment and on the Argentine evidence that monitoring holds increases down when a rate is restored.
The numbers were already in the government’s own record. The Cabinet Secretariat working group that considered the cut minuted pass-through of 13 percent on reductions against 55 percent on increases, averaged over every EU VAT change between 1996 and 2015, together with the Argentine finding that prices ended above where they started once the tax came back, except where the increases were policed.
United Kingdom, 2026 — the hospitality VAT cut
Britain weighed a £12bn VAT cut for hospitality. Dan Neidle’s Tax Policy Associates, whose analyses are read closely by MPs, officials and financial journalists, asked in June 2026 who would actually gain, and answered from our French restaurant study and the asymmetry paper. The asymmetry then reached Parliament’s own reference material: the House of Commons Library’s briefing on hospitality VAT of 21 July 2026 reports the Irish Fiscal Council’s finding that increases pass through far more than cuts, and points to the Tax Policy Associates note.
Austria, 2026 — the food VAT cut
Austria cut VAT on staple foods from 10 percent to 4.9 percent on 1 July 2026. Two months earlier the Budgetdienst, the independent budget office that costs legislation for the Austrian Parliament, built the asymmetry between increases and decreases into its analysis of the measure.
Sweden, 2026 — the food VAT halving
Sweden halved VAT on food from 12 to 6 percent on 1 April 2026, through the end of 2027, and asked Konsumentverket and Konjunkturinstitutet, the government’s economic research institute, to measure whether the cut reached prices. Their first reading, delivered on 1 September 2026, found it fully passed through in grocery stores and only partly in takeaway food. The takeaway study cites our French restaurant paper on what such cuts do to restaurants’ profits, sales and wages. It finds that chain restaurants cut takeaway prices little in the short run, and that independent restaurants were too sparsely observed to measure. Grocery study · Konsumentverket’s summary
Spain, 2023 — the basic-foods VAT cut
Spain cut VAT on basic foods in January 2023. The European Commission’s Joint Research Centre assessed the reform in Price Effects of Temporary VAT Rate Cuts: Evidence from Spanish Supermarkets, drawing on our work for the wider evidence on pass-through.
Greece, 2026 — a food VAT cut declined
Greece chose a voluntary supplier price agreement instead of cutting the rate. The small-business institute IME GSEVEE reviewed the evidence in Informational Brief 37 of June 2026, drawing on three of our papers. The Bank of Greece had weighed the evidence in its July 2025 Economic Bulletin, drawing on the asymmetry paper and the Argentine study, and put the share of a cut that reaches prices at about a fifth. On 6 September 2026 the Prime Minister cited that figure at the Thessaloniki fair to rule a cut out again (Oikonomikos Tachydromos, Naftemporiki).
Germany, 2022 — VAT cuts against the energy-price shock
When Germany debated cutting VAT on food and energy in 2022, the left think tank Institut Solidarische Moderne argued for direct payments instead. Axel Troost’s note of August 2022 rests the case on the asymmetry paper’s finding that increases pass through about twice as strongly as cuts. The same argument had run on Die Linke’s debate platform in May 2022.
Europe, 2020 — VAT cuts as pandemic stimulus
Germany cut VAT for six months from July 2020, Britain cut it for hospitality, and Rome floated a cut of its own. Whether any of it would reach shelf prices was fought over while the policies were being written, and our results were the evidence on both sides of it. Bloomberg Opinion made the case against on 26 June. Il Sole 24 Ore followed four days later, asking whether a cut supports demand or firms, and answered it from the Finnish hairdressing experiment: prices fell 6 percent when the tax was cut and rose 11 percent when it came back.
France, 2018 — the reduced rates under review
France cut VAT for sit-down restaurants from 19.6 to 5.5 percent in 2009, at a cost of around €3bn a year, which made it one of the largest business subsidies in the country. Our evaluation of who had gained from it appeared in French as an Institut des politiques publiques brief in May 2018, and the press ran it for four days.
On 7 June the Finance Minister said he would not rule out re-examining the reduced rates on restaurants, housing and transport. The coverage turned with him, from what the 2009 cut had done to which rates might be raised next.
Le Figaro Economie, 28 May · Capital, 29 May · France 2, Journal de 13h, 29 May · France 3, 19/20, 29 May · LCI, 30 May · BFM Business, 30 May · Ouest-France, 30 May · Economie Matin, 31 May · Les Echos, “Restauration, logement, transport : les taux réduits de TVA dans le viseur de Le Maire”, 7 June · L’Express, “A qui profitent les TVA réduites visées par Bercy ?”, 11 June. Also Alternatives Économiques and Libération. IPP brief and press list
Since then: Aix-Marseille School of Economics, “Etude sur une aide aux entreprises : les taux réduits de TVA, notamment dans la restauration”, October 2018 · Dialogues économiques on CNRS Le journal, “Baisser la TVA : mesure virale ou mesure vitale ? Le cas de la restauration”, March 2019 · Telos, September 2019 · Vox-Fi (DFCG), September 2019 · Atlantico, July 2023.
Expert testimony
I served as expert witness for the Federal Trade Commission in FTC v. H&R Block, 2025, filing a report and sitting for deposition. Case materials
In government documents
The Economic Report of the President of February 2018 takes its estimate of American tax compliance costs from our work: “Benzarti (2017) estimates that the total cost of filing all schedules of the Federal income tax increased from $150 billion in 1984 to $200 billion in 2006 (1.4 percent of 2006 GDP).”
The Österreichische Energieagentur applied the asymmetry to Austria’s solar-PV VAT exemption for the climate and energy ministry in “Photovoltaikpreise im Sinkflug”, November 2024.
The Dutch Ministry of Finance’s impact analysis of the January 2026 increase in VAT on overnight accommodation, from 9 to 21 percent, published in June 2025, took from the asymmetry paper that prices respond more strongly when a rate is raised than when it is cut.
Other coverage
On the research itself: Chicago Booth Review · Microeconomic Insights · VoxEU · NBER Digest · Tax Expenditures Lab.
On tax filing: Los Angeles Times · Washington Post · Time · Quartz · Marketplace · The Blade.