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Wednesday, July 22, 2020 | History

2 edition of Inequality and optimal redistributive tax and transfer policies found in the catalog.

Inequality and optimal redistributive tax and transfer policies

Howell H. Zee

Inequality and optimal redistributive tax and transfer policies

by Howell H. Zee

  • 181 Want to read
  • 8 Currently reading

Published by International Monetary Fund, Fiscal Affairs Department in [Washington, D.C.] .
Written in English

    Subjects:
  • Income distribution -- Econometric models.,
  • Progressive taxation -- Econometric models.,
  • Taxation -- Econometric models.,
  • Revenue -- Econometric models.,
  • Equality -- Econometric models.

  • Edition Notes

    Statementprepared by Howell H. Zee.
    GenreEconometric models.
    SeriesIMF working paper -- WP/99/60
    ContributionsInternational Monetary Fund. Fiscal Affairs Dept.
    The Physical Object
    Pagination29 p. ;
    Number of Pages29
    ID Numbers
    Open LibraryOL20996382M

      Prominent public policy models have hypothesised that rising income inequality will lead to more redistributive spending. Subsequent theoretical advancements and empirical research often failed to find a positive relationship between inequality and redistributive spending, by: 2. It comments on some policy recommendations of the Mirrlees Review, and builds on the authors work on public economics, optimal tax theory, behavioural public economics, and income inequality. The book explains in depth the Mirrlees model and presents various extensions of itOptimal Redistributive Brand: Matti Tuomala.

    Tax-benefit systems have offset two-third of the average increase in primary income inequality, although they appear to have become less effective in doing so since the mids. We find that the public old age pensions and the survivors scheme attribute 60 percent to the increase of redistribution during the period for a subset of. Book review of Optimal Redistributive Taxation extensive margin model takes an alternative view of labor force participation. Labor supply is no longer viewed as a continuous variable, but individuals have to choose between either working a fixed number of hours or .

    This staff discussion note focuses on how fiscal policy can address income inequality in both advanced and developing economies. 4 It reviews the relevant literature and assembles a comprehensive database on disposable (i.e., post-tax-and-transfer) income inequality for 22 . Tax systems raise large amounts of revenue for funding public sector's activities, and tax/transfer policy, together with public provision of education, health care, and social services, play a crucial role in treating the symptoms and the causes of poverty. The normative analysis is crucial for tax/transfer design because it makes it possible to assess separately how changes in the.


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Inequality and optimal redistributive tax and transfer policies by Howell H. Zee Download PDF EPUB FB2

This paper explores the revenue-raising aspect of progressive taxation and derives, on the basis of a simple model, the optimal degree of tax progressivity where the tax revenue is used exclusively to finance (perfectly) targeted transfers to the poor.

Title: Inequality and Optimal Redistributive Tax and Transfer Policies - WP/99/60 Created Date: 5/11/ PM. Inequality and Optimal Redistributive Tax and Transfer Policies Author/Editor: Zee, Howell H.

Inequality and Optimal Redistributive Tax and Transfer Policies This paper explores the revenue-raising aspect of progressive taxation and derives, on the basis of a simple model, the optimal degree of tax progressivity where the tax revenue is used exclusively to finance (perfectly) targeted transfers to.

Abstract: This paper explores the revenue-raising aspect of progressive taxation and derives, on the basis of a simple model, the optimal degree of tax progressivity where the tax revenue is used exclusively to finance (perfectly) targeted transfers to the poor.

The paper shows that not only would it be optimal to finance the targeted transfers with progressive taxation, but that the optimal progressivity increases unambiguously with growing income by: 8.

In his book Income Distribution, the Dutch Nobel-prize winner Tinbergen extensively discusses the merits of increasing the supply of skilled workers relative to unskilled workers to reduce wage the relative supply of skilled workers falls, the skill premium is lowered, and wage inequality diminishes.

Tinbergen’s concern with growing inequality between skilled and unskilled Cited by: On the basis of a simple model in which the tax revenue is used exclusively to finance (perfectly) targeted transfers to the poor, the article shows that not only would it be optimal to finance the targeted transfers with progressive taxation, but the optimal progressivity increases unambiguously with growing income inequality.

We show that the conjunction of the optimal tax and optimal benefits policies constitutes the optimal tax‐and‐benefit policy, given the tax and benefit budget sizes.

A decomposition formula enables trends in the inequality impact of taxes and benefits to be explained in terms of changing policy effectivess (targeting) and budget size by:   Growing wealth inequality has become a key concern for economists, and tackling it requires a deep understanding of how tax and transfer systems affect the income distribution.

Using OECD data, this column argues that taxes and transfers are less effective at reducing inequality today than they were in the mids. This drop in effectiveness has largely been driven by.

completely offset by a tax-and-transfer system that became more redistributive, such that there was no increase in after-tax income inequality up to During the second half of the s, government redistribution through the tax-and-transfer system declined, market income inequality remained high and after-tax income inequality rose.

Tax systems raise large amounts of revenue for funding public sector's activities, and tax/transfer policy, together with public provision of education, health care, and social services, play a crucial role in treating the symptoms and the causes of by: 8.

Published Date: February, Regional and Temporal Variation in the Income Inequality Estimation of Gini Coefficients Chapter 3 Taxation The Optimal Redistributive Tax-transfer Policy Empirical Illustration: Finland Tax systems raise large amounts of revenue for funding public sector's activities, and tax/transfer policy, together with public provision of education, health care, and social services, play a crucial role in treating the symptoms and the causes of poverty.

In this situation, the optimal tax and the optimal transfer policy of Sections and can be joined to given tax and transfer strategy. Under the assump-tion that both τ and ρ are taken as given, the joint strategy can be proved optimal, and actual combined tax and transfer programs can be gauged against it for their welfare.

Stiglitz's book was on accepted principle that economic inequality provides a justification for public intervention in the economy through redistributive tax and welfare policy, and the greater the degree of economic inequality, the greater the optimal level of redistribution policy.

These parameters, of course, are very important for Cited by: 2. Empirical applications of the optimal policies of a class of tax policies and the class of transfer policies considered here, have been discussed in Fellman et al.

( Fellman et al. (, ). behavioural responses to taxes and transfers, affect the optimal tax/transfer system. Optimal tax theory provides a way of thinking rigorously about these trade-offs. Written primarily for graduate students and researchers, this volume is intended as a textbook and research monograph, connecting optimal tax theory to tax policy.5/5(1).

In this paper we develop “optimal yardsticks” to gauge the effectiveness of given tax and benefit policies in reducing inequality. We show that the conjunction of the optimal tax and optimal benefi Skip to Article Content; Skip to Article Information; Search within Optimal Tax‐Transfer Systems and Redistributive Policy.

Johan by: The normative analysis is crucial for tax/transfer design because it makes it possible to assess separately how changes in the redistributive criterion of the government, and changes in the size of the behavioural responses to taxes and transfers, affect the optimal tax/transfer system.

Optimal tax theory provides a way of thinking rigorously. Explores the revenue-raising aspect of progressive taxation and derives, on the basis of a simple model, the optimal degree of tax progressivity where the tax revenue is used exclusively to finance targeted transfer to the poor.

countries, which has reduced the redistributive impact of tax systems. Indicators of tax and transfer policies help to identify different country models The redistributive impact of taxes and transfers depends on their size, mix and the progressivity of each component.

A set of policy indicators has been compiled whichFile Size: KB.Federal tax and spending policies are worsening the problem of economic inequality. But the tax breaks that overwhelmingly benefit the wealthy are only part of the challenge. The increasing diversion of government spending toward income supports and away from opportunity-building programs also is undermining social comity and, ironically, locking in wealth inequality.

The normative analysis is crucial for tax/transfer design because it makes it possible to assess separately how changes in the redistributive criterion of the government, and changes in the size of the behavioural responses to taxes and transfers, affect the optimal tax/transfer system.

Optimal tax theory provides a way of thinking rigorously Author: Matti Tuomala.