Less Income Inequality and More Growth – Are They Compatible? Part 3. Income Redistribution via Taxes and Transfers Across OECD Countries

Abstract

JT03314130Taxes and transfers reduce inequality in disposable income relative to market income. The effect varies, however, across OECD countries. The redistributive impact of taxes and transfers depends on the size, mix and the progressivity of each component. Some countries with a relatively small tax and welfare system (e.g. Australia) achieve the same redistributive impact as countries characterised by much higher taxes and transfers (e.g. Germany) because they rely more on income taxes, which are more progressive than other taxes, and on means-tested cash transfers. This paper provides an assessment of the redistributive effect of the main taxes and cash transfers based on a set of policy indicators and a literature review. It also identifies empirically four groups of countries with tax and transfer systems that share broadly similar features. The paper then assesses potential trade-offs and complementarities between economic growth and income redistribution objectives associated with various tax and transfer reform options. Les impôts et les transferts amènent les inégalités de revenu disponible à un niveau inférieur à celles du revenu marchand. Cet effet redistributif des impôts et transferts n'a pas la même ampleur dans tous les pays de l'OCDE. Il dépend de la taille, de la composition des impôts et transferts ainsi que de la progressivité de chaque composante. Certains pays ayant un système fiscal et de protection sociale relativement peu importants (comme l'Australie, par exemple) obtiennent le même effet redistributif que des pays où les impôts et les transferts sont beaucoup plus élevés (comme l'Allemagne) du fait qu'ils recourent davantage aux impôts sur le revenu, plus progressifs que les autres impôts, et à des transferts en espèces ciblés sur les ménages les plus démunis. Ce document donne une évaluation de l'effet redistributif des principaux impôts et transferts à partir d'une série d'indicateurs de l'action publique et d'une revue des études existantes. Il identifie aussi, de manière empirique, quatre groupes de pays dont les systèmes fiscaux et de protection sociale présentent des caractéristiques à peu près similaires. Le document évalue ensuite les arbitrages et complémentarités potentiels entre les objectifs de croissance économique et de redistribution du revenu relatifs aux diverses possibilités de réforme des systèmes fiscaux et de protection sociale. JEL classification codes:Classification JEL : H2 ; H23 ; H53 ; I3 ; I38 Mots-clés : Inégalités de revenues ; impôts ; transferts, systèmes de protection sociale ; redistribution ; progressivité ; analyse en cluster © OECD (2012) You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. All requests for commercial use and translation rights should be submitted to rights@oecd.org

Exploring the relationship between environmentally related taxes and inequality in income sources

“…Empirical evidence on the effects of fiscal consolidation on income inequality is inconclusive. This might be due to the large heterogeneity in the size and progressivity of the fiscal consolidation programmes implemented in different countries (Joumard et al, 2012). Ball et al (2013) and Woo et al (2013) find support that fiscal consolidation measures increase income inequality.…”

A tributação progressiva dos rendimentos de capital

“…Vários estudos demonstram que a fiscalidade direta em Portugal tem um efeito redistributivo comparativamente elevado (Cantante, 2019;Alves, 2012;Joumard et al, 2012;Rodrigues et al, 2012). Tal deve -se, na verdade, ao enquadramento fiscal dos rendimentos do trabalho e das pensões -as categorias de rendimento sobre as quais a progressividade fiscal incide.…”

Impact of Income Taxes on Wages. A Non Parametric Analysis of the Mexican Case

“…Comparative studies among different countries show the effects of income distribution among different types of taxpayers and households (OECD, 2005;Joumard, Pisu and Bloch, 2012;Paturot, Mellbye and Brys, 2013;Lustig, Pessino and Scott, 2014;ECLAC, 2016;Castañeda, 2016). Overall, they show that the tax rate along with the system of transfers reduces vertical inequity of income redistribution among most members of the Organization for Economic Cooperation and Development (OECD).…”