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Lifetime vs Annual Tax‐Transfer Incidence: How Much Less Progressive?

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  • ANN HARDING

Abstract

Annual fiscal incidence studies have found that income taxes and cash transfers are highly progressive and that their net effect is to redistribute income from rich to poor. Yet many argue Jhat such studies overstate the redistribution achieved by governments and that lifetime analysis is needed New results suggest that both income taxes and cash transfers are progressive on a lifetime basis, although they are much less progressive than annual studies suggest. The Australian tax‐transfer system thus generates some lifetime redistribution from rich to poor, while also enforcing intra‐personal redistribution across the life cycle of individuals.

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  • Ann Harding, 1993. "Lifetime vs Annual Tax‐Transfer Incidence: How Much Less Progressive?," The Economic Record, The Economic Society of Australia, vol. 69(2), pages 179-192, June.
    • Handle: RePEc:bla:ecorec:v:69:y:1993:i:2:p:179-192
    DOI: 10.1111/j.1475-4932.1993.tb01812.x
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    1. Aziz, Omar & Gemmell, Norman & Laws, Athene, 2013. "The Distribution of Income and Fiscal Incidence by Age and Gender: Some Evidence from New Zealand," Working Paper Series 18785, Victoria University of Wellington, Chair in Public Finance.
    2. Robert E. Goodin & Bruce Headey & Ruud Muffels, 1997. "Poverty, Inequality, and Income Redistribution in the 'Three Worlds of Welfare Capitalism: United States, Germany, and the Netherlands, 1985 to 1989," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 66(1), pages 92-101.
    3. Nelissen, Jan H. M., 1998. "Annual versus lifetime income redistribution by social security," Journal of Public Economics, Elsevier, vol. 68(2), pages 223-249, May.
    4. Julian Lamont, 2008. "Incentives and reflective equilibrium in distributive justice debates," The Journal of Philosophical Economics, Bucharest Academy of Economic Studies, The Journal of Philosophical Economics, vol. 2(1), pages 5-19, November.
    5. Peter Whiteford, 1997. "Targeting Welfare: A Comment," The Economic Record, The Economic Society of Australia, vol. 73(220), pages 45-50, March.
    6. Bruce Headey & Robert Goodin & Ruud Muffels & Henk-Jan Dirven, 2000. "Is There a Trade-Off Between Economic Efficiency and a Generous Welfare State? A Comparison of Best Cases of `The Three Worlds of Welfare Capitalism’," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 50(2), pages 115-157, May.

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