Horizontal Inequity and Vertical Redistribution with Indirect Taxes: the Greek Case

Georgia Kaplanoglou and David M Newbery ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Non-uniform indirect taxes treat equals and those unequal differently (horizontal inequity and vertical redistribution). Horizontal inequity is caused by taste differences among similar households, but some excises are designed to reflect social, not revealed, preferences. We apply two methodologies for decomposing the overall redistributive effect of the present and three alternative indirect tax structures into vertical and horizontal effects for Greece, using the Household Expenditure Survey micro-database. In all cases the taste component is considerable, even when we allow for social preferences, while improvements in vertical redistribution can be achieved, albeit at the cost of increased horizontal inequity.

Keywords: distributional effect of taxes; horizontal inequality; vertical redistribution; indirect tax reform; Greece. (search for similar items in EconPapers)
JEL-codes: D63 H23 D30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-pbe and nep-pub
Date: 2008-01
View list of references

Downloads: (external link)
http://www.econ.cam.ac.uk/dae/repec/cam/pdf/cwpe0806.pdf Working Paper Version (application/pdf)

Related works:
Journal Article: Horizontal Inequity and Vertical Redistribution with Indirect Taxes: The Greek Case* (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cam:camdae:0806

Access Statistics for this paper

More papers in Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Series data maintained by Howard Cobb ().