Redistributive Effect Of Taxes Research Articles

Redistribution and human development: evidence from Europe

This study examines the relationship between human development and the redistributive effect of taxes and government transfers in 30 European over the period 1990-2021 by means of a fixed-effects panel model. Overall, the analysis suggests that increases in redistribution lead to an increase of development. The coefficient for a one-period lag is also found to be positive and significant, suggesting that the effects of redistributive policies show some persistence. When replicating the experiment for different European regions, the greatest impact of redistributive measures is found in Northern Europe, as opposed to Southern Europe, where the impact on development is not found to be significant.

Redistribution Effects of Taxes on Expenditure:The Case of Turkey (2002-2013)

Tax and transfer policies have been main research areas in reducing income inequality, which gained great importance particularly in the last century. Economists, who focused on this area, argue that unlike income tax, a well-designed expenditure tax might be more efficient in reducing income inequality because it is easier to manage, does not levy a tax on capital income, and does not discriminate between current and future consumption. In this study, redistributive effects of taxes on expenditures are investigated based on the household budget survey micro data of TURKSTAT, which represents a great share of the indirect taxes. It is found that the impact of taxes on goods and services on inequality is not significant by the analyses that are based on sequential revenue tranches of indices and total consumption distribution in terms of gross and net consumption shares, the Gini coefficients, decile ratios and Kakwani index. Very close to zero and negative in the relevant period, Kakwani index implies that expenditure taxes in Turkey can be considered regressive and increase the inequality. By comparing total consumption expenditures, amount paid on expenditure taxes, and household disposable incomes; it is indicated that households at the bottom of the distribution are on average net spenders, and consumption taxes increase the gap between the poor and the rich.

Redistributive Effect of Taxes and Transfers: Evidence from China

China’s sustained high-speed several-decade-long economic growth has raised the level of per capita income, but also brought about a serious income gap. Taxes and public transfers are main policy governmental tools in the process of redistribution. This paper leads a comprehensive analysis of the impacts of taxes and transfers on income redistribution using decomposition method and is based on China’s Urban Household Survey Data (2002-2009) derived from the National Bureau of Statistics of China. The empirical results reveal that government’s net transfer reduces urban household’s increasing market income inequality, and the improvement effect increases with time. Taking a closer look, it shows that both tax and transfer play positive adjusting roles. Transfer’s contribution is relatively larger, reflected mainly in the improvement of horizontal equality, while tax’s effect is mainly reflected in vertical equality. On the whole, the combined redistribution effect of personal income tax and social insurance expenses from residents to government is positive, and can play a role in regulating the income redistribution. Endowment insurance, social relief and unemployment insurance reduce inequality in the transfers of government to residents, even though the last two items’ effects are very weak. In contrast, provident fund expands income gap. The conclusions reached in this paper will refer to the refinement of income distribution reform, promotion of tax reform, and improvement of the social security system. Highlights The comparative analysis of tax and transfer impact on income redistribution has been done based on the research of urban households in China in 2002–2009 Rising positive impact of net transfers from the budget on the reduction of income inequality among urban population is demonstrated The impact of transfers on horizontal inequality reduction, and the impact of taxeson vertical inequality reduction is established The need to continue the tax reform and improve the social security system in order to reduce the inequality in the income of the population is demonstrated For citation Liu Baihui. Redistributive Effect of Taxes and Transfers: Evidence from China. Journal of Tax Reform, 2017, vol. 3, no. 1, pp. 43–51. DOI: 10.15826/ jtr.2017.3.1.030 Article info Received February 14, 2017; accepted March 27, 2017

Recent Trends in Income Redistribution in Australia: Can Changes in the Tax‐Benefit System Account for the Decline in Redistribution?

We examine trends in the redistributive impact of the tax‐benefit system in Australia between 1994 and 2009 using a framework that allows us to separate the contributions of taxes, benefits, and taxes and benefits combined. Furthermore, we identify the effect of tax‐benefit policy reforms on income redistribution over the period. We find that after reaching a peak value in the late 1990s, the redistributive effect of taxes and benefits declined sharply. Although reforms to the tax‐benefit system contributed to the decline in redistribution, their contribution was limited compared to the role played by the changes in market income distribution.

Redistribuční efekty pojistného na veřejné zdravotní pojištění v České republice

Příspěvek vychází z vědeckého článku, ve kterém autoři testují hypotézu, že když je systém zdravotního pojištění zastropován a pojistné je využíváno jako převažující zdroj financování zdravotnictví, tak působí regresivně. Toto tvrzení příspěvek ověřuje na pojistném na veřejné zdravotní pojištění v České republice v roce 2011. Uvedená otázka je dnes v České republice velmi aktuální z důvodu možného zpětného zavedení maximálního vyměřovacího základu a jeho možných dopadů na redistribuci. Práce se dále věnuje i dalším pojištěncům - osobám samostatně výdělečně činným, osobám bez zdanitelných příjmů a státním pojištěncům. V poslední části je analyzován redistribuční efekt daní a sociálního pojistného.

Recent Trends in Income Redistribution in Australia: Can Changes in the Tax-Transfer System Account for the Decline in Redistribution?

We examine trends in the redistributive impact of the tax‐benefit system in Australia between 1994 and 2009 using a framework that allows us to separate the contributions of taxes, benefits, and taxes and benefits combined. Furthermore, we identify the effect of tax‐benefit policy reforms on income redistribution over the period. We find that after reaching a peak value in the late 1990s, the redistributive effect of taxes and benefits declined sharply. Although reforms to the tax‐benefit system contributed to the decline in redistribution, their contribution was limited compared to the role played by the changes in market income distribution.

Some considerations on measuring the progressive principle violations and the potential equity in income tax systems

Kakwani and Lambert (1998) state three axioms which should be respected by an equitable tax system; then they propose a measurement system to evaluate at the same time the negative influences that axiom violations exert on the redistributive effect of taxes, and the potential equity of the tax system, which would be attained in absence of departures from equity. The authors calculate both the potential equity and the losses due to axiom violations, starting from the Kakwani (1977) progressivity index and the Kakwani (1984) decomposition of the redistributive effect. In this paper, we focus on the measure suggested by Kakwani and Lambert for the loss in potential equity, which is due to violations of the progressive principle: the authors’ measure is based on the tax rate re-ranking index, calculated with respect to the ranking of pre-tax income distribution. The aim of the paper is to achieve a better understanding of what Kakwani and Lambert’s measure actually represents, when it corrects the actual Kakwani progressivity index. The authors’ measure is first of all considered under its analytical aspects and then observed in different simulated tax systems. In order to better highlight its behaviour, simulations compare Kakwani and Lambert’s measure with the potential equity of a counterfactual tax distribution, which respects the progressive principle and preserves the overall tax revenue. The analysis presented in this article is performed by making use of the approach recently introduced by Pellegrino and Vernizzi (2013).

Disentangling Income Inequality and the Redistributive Effect of Taxes and Transfers in 20 LIS Countries Over Time

In most OECD countries the gap between rich and poor has widened over the past decades. This paper analyzes whether and to what extent taxes and social transfers have contributed to this trend. Has the redistributive power of different social programs changed over time? The paper contributes to the literature by disentangling several parts of fiscal redistribution in a comparative setting. We use micro-data from the Luxembourg Income Study to examine household market inequality, redistribution from transfers and taxes, and the underlying social programs that drive the changes, for 20 countries from the mid-1980s to mid-2000s. The contribution of each program is estimated using a sequential accounting budget incidence decomposition technique. The aim of this paper is to offer detailed information on the redistributive impact of social transfer programs. We focus on changes in fiscal redistribution of 13 different social programs and taxes. We observe a sizeable increase in primary household inequality in all 20 countries over the last 25 years (except Ireland). In most countries, the extent of redistribution has increased too. Tax-benefit systems have offset two-third of the average increase in primary income inequality, although they appear to have become less effective in doing so since the mid-1990s. We find that the public old age pensions and the survivors scheme attribute 60 percent to the increase of redistribution during the period 1985-2005 for a subset of countries considered (with full tax/benefit information). Social assistance accounts for 20 percent, and the benefits for sickness, disease, and disability account for around 13 percent of the total increase in redistribution. Other transfers (invalid career benefits, education benefits, child care cash benefits and other child and family benefits) account for 22 percent of the total increase in redistribution. On the contrary, taxes slowed down redistribution by 17 percent during 1985-2005.

On measuring violations of the progressive principle in income tax systems

Kakwani and Lambert (Eur J Polit Econ 14(2):369–380, 1998) state three axioms which should be respected by an equitable tax system. Using the Atkinson–Plotnick–Kakwani re-ranking indexes of taxes, tax rates, and post-tax incomes, calculated with respect to the ranking of pre-tax income distribution, they then propose a measurement system to evaluate the negative influences that axiom violations exert on the redistributive effect of taxes. In this paper, we reconsider the way Kakwani and Lambert measure violations of their second axiom, which concerns the re-ranking of tax rates. We construct a non-negative index which is strictly faithful to Kakwani and Lambert’s commands; we show that the Authors’ measure does not exactly fit the statements made in their second axiom. Both Kakwani and Lambert’s original measurement system and the modified one are then applied to Italian personal income tax in 2008. According to the modified measurement system, the average tax rate seems to play a smaller role than that suggested by the results gained using Kakwani and Lambert’s original methodology.

ON THE REDISTRIBUTIVE EFFECT OF TAXES AND BENEFITS*

Scottish Journal of Political EconomyVolume 32, Issue 1 p. 39-54 ON THE REDISTRIBUTIVE EFFECT OF TAXES AND BENEFITS* Peter J. Lambert, Peter J. Lambert University of York, EnglandSearch for more papers by this author Peter J. Lambert, Peter J. Lambert University of York, EnglandSearch for more papers by this author First published: February 1985 https://doi.org/10.1111/j.1467-9485.1985.tb00786.xCitations: 35 † *This paper is a revised version of a paper presented at the 1983 European Meeting of the Econometric Society in Pisa, Italy. The author is grateful to a colleague, John Hutton, for helpful comments on the earlier version. AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Citing Literature Volume32, Issue1February 1985Pages 39-54 RelatedInformation