Impact of tax progressivity on regional income inequalities: a comparative analysis between Brazil and Germany

Raihan Mian (), Swarna Bintay Kadir () and Diego Sanches Corrêa ()

Brazilian Journal of Political Economy, 2025, vol. 45, issue 2, 341-360

Abstract: The progressivity of a country’s tax system can be crucial for reducing incomeand regional inequalities. Focusing on the cases of Germany and Brazil, in this article we analyzethe tax system progressivity through an original indicator based on the PersonalIncome Tax (PIT) and the Value Added Tax (VAT) to determine its association with incomeand regional inequalities at the national and sub-national levels. We show that a progressivetax system reduces income and regional inequalities. JEL Classification: H20.

Keywords: Tax policy; personal income tax; value added tax; income inequality; Gini coefficient; progressivity indicator (search for similar items in EconPapers)
Date: 2025
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