The Redistributive Effect and Progressivity of Taxes Revisited: An International Comparison across the European Union

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractOver the last few years concern for income inequality in European countries has increased remarkably. In this context, taxation is an important redistributive instrument and we investigate the redistributive role of direct taxes. We focus on the EU-15 countries and the evolution over the period 1998-2008, using EUROMOD, the EU-wide tax-benefit model. The research aim of this paper is twofold. First, we investigate empirically whether there is a link between pre-tax income inequality and redistribution through taxes. Second we hereby test whether there is a relationship between progressivity and the average tax level, the two building stones of the redistributive impact of taxes.JEL Classification: C81; D31; H23; H24

Who benefits from the ‘hidden welfare state’? The distributional effects of personal income tax expenditure in six countries

“…4. For example, Verbist (2004) looks into whether the number of tax bands is correlated with the progressivity of the tax rate schedule. 5.…”

“…A different strand of research examines tax expenditures in the context of measuring the progressivity of the various components of income taxation in a comparative cross-national setting (Verbist, 2004;Wagstaff et al, 1999;Wagstaff and van Doorslaer, 2001). It finds that, while significant cross-national variation exists, tax credits and lump sum allowances are generally progressive whereas tax deductions are mostly regressive.…”

Personal income tax reforms: A genetic algorithm approach

“…Given its progressive nature, the PIT is a globally fundamental tool through which the redistributive effect of the whole tax system of a country is achieved, even if a large variability, in terms of both tax revenue and redistributive effect, is observed around the world (Verbist and Figari, 2014;Wagstaff et al, 1999). The two key reasons for this variability deal with the role played by social preferences for redistribution (Lefranc, Pistolesi and Trannoy, 2008) and the equity-efficiency trade-off of taxation (Tuomala, 2016;Saez, 2001;Feldstein, 1976;Sandmo, 1981;Stern, 1976).…”

Jakość systemów podatkowych a ich wydajność fiskalna

“…Oznacza to, że kraje, w których poziom nierówności dochodu przed opodatkowaniem jest wysoki wykazują mniejszy wpływ opodatkowania na zmniejszanie tej nierówności niż kraje o niższym stopniu nierówności dochodu przed opodatkowaniem (Verbist, Figari, 2014). Wnioski te są zgodne z wynikami Alonso i Garcimartína (2011), którzy wskazali, że jednym z czynników oddziałujących na poziom dochodów podatkowych jest poziom nierówności dochodów, przy czym wpływ ten jest ujemny.…”