The evolution of tax implicit value judgements, redistribution and income inequality in the UK: 1968 to 2015

Justin van de Ven and Nicolas Hérault
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Justin van de Ven: NIESR, London, UK

No 498, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: An issue of interest in the literature that explores the drivers of inequality is the distributional bearing of tax and transfer policy, where an important theme concerns changes in the relative treatment of alternative population subgroups. We develop an empirical approach for quantifying the value judgements implicit in the relative treatment of demographic subgroups by a tax and transfer system. We apply this approach to UK data reported at annual intervals between 1968 and 2015, documenting remarkable improvements in tax and transfer treatment enjoyed by some population subgroups – particularly families with children and age pensioners – relative to the wider population. We show that accounting for the changing value judgements implicit in tax and transfer policy provides a fresh perspective on the evolution of income inequality and redistribution; one that departs from the prevailing view that UK inequality stopped rising from the early 1990s.

Keywords: equivalence scale; inequality; redistribution; horizontal equity. (search for similar items in EconPapers)
JEL-codes: D31 H23 I38 (search for similar items in EconPapers)
Pages: 133 pages
Date: 2019-06
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Related works:
Working Paper: The evolution of tax implicit value judgements, redistribution and income inequality in the UK: 1968 to 2015 (2019)
Working Paper: The evolution of tax implicit value judgements, redistribution and income inequality in the UK: 1968 to 2015 (2019)
Working Paper: The evolution of tax implicit value judgements, redistribution and income inequality in the UK: 1968 to 2015 (2019)
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