The relationship between tax structures and income inequality
Carlândia Brito Santos Fernandes,
Marcos Roberto Vasconcelos,
Marina Silva da Cunha and
Thomas Obst
Additional contact information
Carlândia Brito Santos Fernandes: Universidade Estadual de Maringá
Marcos Roberto Vasconcelos: Universidade Estadual de Maringá
Marina Silva da Cunha: Universidade Estadual de Maringá
Revista Desarrollo y Sociedad, 2025, vol. 100, issue 4, 79-95
Abstract:
The global rise in income inequality has heightened interest in how fiscal policy—particularly the compo-sition of tax revenues—affects income distribution. This study examines the relationship between gov-ernment revenues from direct and indirect taxes and income inequality, contributing to the tax incidence literature through three key innovations: it focuses on a recent period (2000–2012), compares countries with dif-ferent income levels and tax structures, and addresses endogeneity using the System Generalized Method of Moments (System GMM) estimator. The empirical analysis reveals that a greater reliance on indirect taxation is associated with higher income inequality, while a larger share of direct taxes correlates with reduced inequality. These patterns hold across both OECD and non-OECD countries. Given the higher Gini coefficients observed in non-OECD economies, the findings highlight the importance of enhancing tax progressivity as a policy strategy to reduce income disparities and promote more equitable economic development.
Keywords: Fiscal policy; tax structure; income distribution; economic inequality; developing countries (search for similar items in EconPapers)
JEL-codes: E62 H23 O15 O23 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:
Downloads: (external link)
https://revistas.uniandes.edu.co/index.php/dys/article/view/8818/10955
https://revistas.uniandes.edu.co/index.php/dys/article/view/8818/10955
Related works:
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: https://EconPapers.repec.org/RePEc:col:000090:021492
DOI: 10.13043/DYS.100.4
Access Statistics for this article
More articles in Revista Desarrollo y Sociedad from Universidad de los Andes,Facultad de Economía, CEDE Contact information at EDIRC.
Bibliographic data for series maintained by Universidad De Los Andes-Cede ().