Redistributive Effect of U.S. Taxes and Public Transfers, 1994-2004

Kinam Kim () and Peter J. Lambert ()
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Kinam Kim: Ministry of Health and Welfare, Republic of Korea
Peter J. Lambert: University of Oregon Economics Department

University of Oregon Economics Department Working Papers from University of Oregon Economics Department

Abstract: In this study we derive measures of the redistributive effect of taxes and welfare expenditures for the U.S. using CPS data for the years 1994, 1999 and 2004. We find that whilst income inequality increased, the redistributive effect of taxes and public transfers together reduced market income inequality by approximately 30 percent. In 2004, 88 percent of the net redistributive effect resulted from public transfers and 12 percent from taxes. The total redistributive effect would have improved by 35 percent in 2004 if, all else equal, horizontal inequities in taxes and public transfers could have been eliminated.

Keywords: Redistributive effect; Direct taxes; Public transfers; Inequality (search for similar items in EconPapers)
JEL-codes: D63 H23 (search for similar items in EconPapers)
Pages: 96
Date: 2007-02-06, Revised 2007-02-06
New Economics Papers: this item is included in nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:ore:uoecwp:2007-3

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