The impact of tax policy on the welfare state

Anca Brad

MPRA Paper from University Library of Munich, Germany

Abstract: The paper seeks to find the impact of tax policy on income and wealth redistribution, as well as its effects on welfare. Redistribution through transfers has a major contribution to reducing inequality and polarization of income. The fiscal reforms in present-day circumstances imply as outcome the so called “tax uniformity”, embedding income redistribution through budgetary mechanisms, an arrangement that greatly depends on the alternative chosen by the authorities for the distribution of tax burden among various categories of contributors. In Eastern European economies, under the absence of a sustainable economic growth and structural reforms, flat taxes can lead to polarization of income. The authors argue that if progressive rates are feasible in eastern countries, taxation reconsideration generates economic effects triggered by the change in tax burden and social effects triggered by a decrease in the unemployment, living conditions, education and labour.

Keywords: tax policy; redistribution; flat tax; progressive rates; welfare state (search for similar items in EconPapers)
JEL-codes: D31 E62 H20 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-acc, nep-mac, nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:40347

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