Empiric Evidences On The Relationship Between Tax Revenues and Income Distribution Inequality: Kónya Panel Causality Test

Abstract

The purpose of the study is to determine whether tax revenues have any effect on income distribution. Taxes have a social purposes besides their economic purposes. In line with these purposes, it also aimed to reduce the inequality in income distribution through policy. This situation, which is expressed as secondary income distribution, is an application that can be encountered in almost every country in the world. Kónya (2006) Panel causality analysis was preferred as a method in the study that examined the 1991-2016 period of 16 OECD countries whose datasets are accessible. The data used in the study was derived from the OECD database and SWIID database that calculated by Frederic Solt in 2009. The results revealed the corrective effect of taxes on income distribution inequality in some countries for the sample group. While taxes in France and Luxembourg reduced income distribution inequality, the decrease in income