The Impact of Tax and Expenditure Policies on Income Distribution: Evidence from a Large Panel of Countries

Jorge Martinez-Vazquez (), Violeta Vulovic () and Blanca Moreno Dodson ()
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Blanca Moreno Dodson: The World Bank

Hacienda Pública Española / Review of Public Economics, 2012, vol. 200, issue 1, 95-130

Abstract: This paper focuses is on the potential role that taxation and public expenditure policies play in general in affecting income distribution. We find that progressive personal income taxes and corporate income taxes reduce income inequality. However, the effect of corporate income taxes seems to be eroded away in open or globalized economies. We also find that general consumption taxes, excise taxes and customs duties have a negative impact on income distribution. on the expenditure side, we find that higher shares of GDP on social welfare, education, health and housing public expenditures have a positive impact on income distribution.

Keywords: Tax Policy; Public Expenditures; Income Distribution; Tax Progressivity (search for similar items in EconPapers)
JEL-codes: H23 H24 H51 H52 H53 H54 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (55)

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Working Paper: The Impact of Tax and Expenditure Policies on Income Distribution: Evidence from a Large Panel of Countries (2012)
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