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Redistribution in real-world PIT: Evidence from Italian tax records

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  • Paolo Di Caro

    (Ministry of Economy and Finance of Italy)

Abstract

This paper studies the redistributive capacity of the Italian personal income tax by using individual tax files. We propose and apply a modified version of the decomposition of the Reynolds-Smolensky index. The main findings of the work can be listed as follows. Few tax instruments explain most of the redistributive effects of the Italian PIT. The distributional implications of PIT tax credits and other components show relevant heterogeneity on a regional level. Our results integrate the findings of previous works analysing the Italian case with different datasets and focusing on different years. The advantages and shortcomings of using tax statistics for studying redistribution are also discussed. The summary of the results and future avenues of research are conclusively presented.

Suggested Citation

  • Paolo Di Caro, 2018. "Redistribution in real-world PIT: Evidence from Italian tax records," Working Papers wp2018-2, Ministry of Economy and Finance, Department of Finance.
    • Handle: RePEc:ahg:wpaper:wp2018-2
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Demetrio Guzzardi & Elisa Palagi & Andrea Roventini & Alessandro Santoro, 2022. "Reconstructing Income Inequality in Italy: New Evidence and Tax Policy Implications from Distributional National Accounts," World Inequality Lab Working Papers halshs-03693201, HAL.
    2. Boscolo, Stefano, 2019. "The contribution of proportional taxes and tax-free cash benefits to income redistribution over the period 2005-2018: Evidence from Italy," EUROMOD Working Papers EM18/19, EUROMOD at the Institute for Social and Economic Research.
    3. Massimo Baldini, 2021. "Redistribution and progressivity of the Italian personal income tax, 40 years later," Fiscal Studies, John Wiley & Sons, vol. 42(2), pages 345-366, June.
    4. Castelluccio, Marco, 2021. "Flat tax? Maybe not a bad idea after all," Research in Economics, Elsevier, vol. 75(1), pages 60-78.
    5. Stefano Boscolo, 2019. "Quantifying the Redistributive Effect of the Erosion of the Italian Personal Income Tax Base: A Microsimulation Exercise," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2019(2), pages 39-80.
    6. Stefano Boscolo, 2019. "The Contribution of Proportional Taxes and Tax-Free Cash Benefits to Income Redistribution over the Period 2005-2018: Evidence from Italy," Department of Economics 0152, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".

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    More about this item

    Keywords

    Personal income tax; Redistribution; Tax Statistics; Regional effects;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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