Redistribution within the tax-benefits system in Austria

Michael Christl, Köppl–Turyna, Monika, Hanno Lorenz and Dénes Kucsera
Authors registered in the RePEc Author Service: Monika Irena Köppl-Turyna

Economic Analysis and Policy, 2020, vol. 68, issue C, 250-264

Abstract: The aim of this study is to analyze redistribution within the Austrian tax-benefits system. In this work, we take a comprehensive view and include not only direct taxation and cash benefits but also indirect taxes and in-kind transfers. We look at two kinds of redistribution: between households belonging to different income groups, and between generations, taking a life-cycle perspective. Our analysis shows that indirect taxes (as understood in previous literature) have a regressive effect on the tax-benefits system. In contrast, in-kind benefits seem to have a progressive effect. To analyze the impact of both, we extend our income concept to include both indirect taxes and in-kind benefits. If we look at the distributional impact, we find that the inequality-enhancing effect of indirect taxes is more than offset by the inequality-reducing effect of in-kind benefits. The Gini coefficient increases from 0.24 to 0.26 due to indirect taxes, but when adding in-kind benefits, the Gini coefficient is reduced to 0.23. The overall effect of both indirect taxes and in-kind benefits is progressive.

Keywords: Tax-benefits model; EUROMOD; Welfare state; Austria; In-kind benefits (search for similar items in EconPapers)
JEL-codes: D31 H24 I38 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Redistribution within the tax-benefit system in Austria (2020)
Working Paper: Redistribution within the tax-benefit system in Austria (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:68:y:2020:i:c:p:250-264

DOI: 10.1016/j.eap.2020.09.011

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