Abstract
ABSTRACT Tax mixes are important components of welfare systems, affecting income inequality, labour market outcomes and economic performance. Still, they are relatively under-examined in the literature studying the convergence of EU welfare states. Most existing analyses of tax mix convergence are limited to western Europe, mainly use twentieth-century data and do not control for domestic determinants of tax policy. I therefore study the determinants of tax mix composition and convergence in a panel of 30 EU and OECD countries between 1980 and 2019 using linear regressions. I find that tax mixes converge and shift from personal income taxes towards more regressive revenue sources. Contrary to theoretical predictions, both observations are almost unrelated to proxies of tax competition. Instead, the main driving factor is EU membership. Tax mixes of Central and Eastern European member states, however, do not Europeanise: they constitute a distinct group with low and persistently regressive taxation.
Published Version
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