IMF Working Papers

Measuring the Redistributive Capacity of Tax Policies

By Charles Vellutini, Juan Carlos Benitez

October 22, 2021

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Charles Vellutini, and Juan Carlos Benitez. Measuring the Redistributive Capacity of Tax Policies, (USA: International Monetary Fund, 2021) accessed November 5, 2024

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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:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2021/252

  • Stock No:

    WPIEA2021252

  • ISBN:

    9781589064089

  • ISSN:

    1018-5941