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Tax–Benefit‐revealed Redistributive Preferences Over Time: Ireland 1987–2005

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  • Olivier Bargain
  • Claire Keane

Abstract

By inverting Saez's model of optimal income taxation, we characterize the redistributive preferences of the Irish government between 1987 and 2005. The (marginal) social welfare function revealed by this approach is consistently comparable over time and shows great stability despite profound changes in market incomes and important fiscal reforms over the period. Results are robust to numerous checks regarding data, income concepts, and elasticities. A comparison with the UK shows marked differences reflecting the narrow political spectrum in Ireland compared with radical changes in British politics over the past 30 years. Some ‘anomalies’ in the revealed social welfare function suggest introducing transfers to the working poor.

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  • Olivier Bargain & Claire Keane, 2010. "Tax–Benefit‐revealed Redistributive Preferences Over Time: Ireland 1987–2005," LABOUR, CEIS, vol. 24(s1), pages 141-167, December.
    • Handle: RePEc:bla:labour:v:24:y:2010:i:s1:p:141-167
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    2. Tajika, Tomoya, 2015. "Japanese government and utilitarian behavior," Journal of the Japanese and International Economies, Elsevier, vol. 36(C), pages 90-107.
    3. Immervoll, Herwig & Richardson, Linda, 2011. "Redistribution Policy and Inequality Reduction in OECD Countries: What Has Changed in Two Decades?," IZA Discussion Papers 6030, Institute of Labor Economics (IZA).
    4. Lockwood, Benjamin B. & Weinzierl, Matthew, 2016. "Positive and normative judgments implicit in U.S. tax policy, and the costs of unequal growth and recessions," Journal of Monetary Economics, Elsevier, vol. 77(C), pages 30-47.
    5. Jacobs, Bas & Jongen, Egbert L.W. & Zoutman, Floris T., 2017. "Revealed social preferences of Dutch political parties," Journal of Public Economics, Elsevier, vol. 156(C), pages 81-100.
    6. Olli Kärkkäinen, 2013. "Revealed preferences for redistribution and government’s elasticity expectations," Working Papers 284, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    7. Fabian Feger & Doina Radulescu & Doina Maria Radulescu, 2018. "Redistribution through Income Taxation and Public Utility Pricing in the Presence of Energy Efficiency Considerations," CESifo Working Paper Series 7195, CESifo.

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    More about this item

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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