Measuring the Redistributive Capacity of Tax Policies

By Charles Vellutini, Juan Carlos Benitez

October 22, 2021

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Format: Chicago

Charles Vellutini, and Juan Carlos Benitez. Measuring the Redistributive Capacity of Tax Policies, (USA: International Monetary Fund, 2021) accessed December 22, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper presents a novel technique to measure and compare the redistributive capacity of observed tax (or transfer) policies. The technique is based on income distribution simulations and controls for differences in pre-tax income distributions. It assumes that the only information on the pre-tax distribution available in each country-year is the Gini coefficient and the mean (GDP per capita). We illustrate the technique with an application to the personal income tax, using a dataset of 108 countries over the 2007-2018 period.

Subject: Income, Income distribution, Income inequality, National accounts, Personal income tax, Progressive taxation, Tax policy, Taxes

Keywords: Global, Income, Income distribution, Income distribution, Income inequality, Market income Gini Coefficients, Novel technique, Personal income tax, Personal income tax, PIT Progressive, PIT redistribution, Progressive taxation, Progressivity, Redistribution, TRANSPLANT-AND-COMPARE method

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/252
Stock No:

WPIEA2021252
ISBN:

9781589064089
ISSN:

1018-5941

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