【正文】 d “high” scenario, the budget effect is approximately a loss of 553 million and 1,074 billion, respectively.Table 2: Static Effects of the Tax ReformScenario (tax reduction) Loss of revenue 1,293,511,875 862,341,250 1,724,682,500Additional revenues1. lower budget expenditures 214,270,000 149,989,000 321,405,0002. lower spending for state panies 107,892,000 75,524,400 161,838,0003a. increased ine tax revenues 35,974,729 21,370,568 35,081,9383b. increased corporate and dividend tax revenues 89,936,823 62,330,822 131,557,266 Total static loss 845,438,323 553,126,461 1,074,800,297Source: Authors’ calculations.Dynamic Effects The dynamic effects are due to the shrinkage of the informal (gray) economy, the increase of economic growth, and the savings as a result of the higher employment and the lower increase in unemployment. According to various studies, about a quarter of the labor force has engaged in the informal economy. These are people who have not declared a formal job, and hence have not paid ine and payroll taxes. At the same time, about a third of the formallyemployed have declared ine lower than their actual ine, in an attempt to avoid taxes. We assume that the reduction in payroll taxes will bring more people in the formal economy。 in 2020, an additional 3 percentage points。Tax Stimulus as Crisis ResponseGeorgi Angelov and Simeon Djankov1January 2020Abstract Many countries are contemplating stimulus packages as a response to the deepening economic crisis. This paper discusses the benefits of tax reform as a crisisresponse measure. It provides a calculation of the benefits of such reform, taking as example the reduction of payroll taxes in Bulgaria. We also estimate the costs in terms of foregone revenue. We find that a reform to reduce the payroll tax by percentage points, from % to %, would result in 130,000 jobs been created or saved, and a % increase in annual GDP growth. Taking the static and dynamic effects of such reform into account, the cost would amount to % of GDP. The reform has three additional benefits. First, it is not subject to corruption: the government is not in a position to distribute largesse as under a fiscal expansion program. Second, it works as a direct stimulus every business and worker in the formal economy gets the benefit. Third, tax reform is quick to implement and can have immediate effects.1 Senior Economist at Open Society Institute, Bulgaria, and Chief Economist, Finance and Private Sector VicePresidency, The World Bank Group. Contacts: and . We thank Caroline Freund for useful ments.IntroductionMany countries are contemplating stimulus packages as a response to the deepening economic crisis. This has invigorated an old debate: should governments focus on fiscal expansion or on tax incentives? Some proposals have both: for example in Germany,2 Latvia, the United Kingdom and the United States. Even in these countries, there is intense discussion on what the right mix between fiscal and tax stimulus is.Fiscal expansion makes sense as a crisisresponse device: it can be narrowly targeted, for example at lowskill jobs. The most obvious fiscal expansion is for infrastructure projects these can create jobs and are highly visible, thus generating a sense that the government is being responsive.But what if the government doesn39。 and 2% indirect state There have already been some reductions in payroll taxes in this decade. In 2020, payroll taxes were cut by 6 percentage points。 *** significant at 1%Source: The analysis is based on Djankov et al (2020).For our base specification, we assume a tax reform of percentage points reduction in payroll taxes, including a 5 percentage points reduction in taxes for businesses and a percentage points reduction for workers. Under this scenario, the reform could result in 130,000 jobs being created or saved during the crisis, and a half percentage point increase in GDP growth.We also report a “l(fā)ow” and “high” scenario: a 5 percentage points reduction ( percent for businesses and percent for work