Income inequality and the tax structure: Evidence from developed and developing countries

Antonis Adam, Pantelis Kammas () and Athanasios Lapatinas

Journal of Comparative Economics, 2015, vol. 43, issue 1, 138-154

Abstract: This paper seeks to examine the effect of income inequality on the structure of tax policies. We first use a simplified theoretical framework which allows us to formalize the testable implications of the relevant literature. Subsequently, our analysis indicates that more unequal economies rely heavier on capital relative to labor income taxation. This relationship remains robust across various alternative measures of income inequality and most importantly through alternative political regimes. In addition, our analysis investigates the role of the tax structure on the relationship between income inequality and economic growth. Our empirical findings provide evidence in favor of a political economy channel through which income inequality affects economic growth.

Keywords: Inequality; Tax structure; Redistribution (search for similar items in EconPapers)
JEL-codes: H10 H23 H26 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Working Paper: Income inequality and the tax structure: Evidence from developed and developing countries (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:43:y:2015:i:1:p:138-154

DOI: 10.1016/j.jce.2014.05.006

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