The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An Overview

Nora Lustig, Carola Pessino and John Scott

No 1313, Working Papers from Tulane University, Department of Economics

Abstract: How much redistribution and poverty reduction is being accomplished in Latin America through social spending and taxes? Standard fiscal incidence analyses applied to Argentina, Bolivia, Brazil, Mexico, Peru, and Uruguay yield the following results. Direct taxes and cash transfers reduce inequality and poverty by nontrivial amounts in Argentina, Brazil, and Uruguay, less so in Mexico and relatively little in Bolivia and Peru. While direct taxes are progressive, the redistributive impact is small because direct taxes as a share of GDP are low. Cash transfers are quite progressive in absolute terms except in Bolivia where programs are not targeted to the poor. In Bolivia and Brazil, indirect taxes almost completely offset the poverty-reducing impact of cash transfers. In-kind transfers in education and health reduce inequality in all countries by considerably more than cash transfers.

Keywords: fiscal incidence; inequality; poverty; taxes; social spending; Latin America (search for similar items in EconPapers)
JEL-codes: H22 I3 O1 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2013-04
New Economics Papers: this item is included in nep-lam, nep-ltv and nep-pbe
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Citations: View citations in EconPapers (83)

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http://repec.tulane.edu/RePEc/pdf/tul1313.pdf First Version, April 2013 (application/pdf)

Related works:
Working Paper: The impact of taxes and social spending on inequality and poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An overview (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:tul:wpaper:1313

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