Horizontal Inequity and Vertical Redistribution with Indirect Taxes: the Greek Case
AbstractNon-uniform indirect taxes treat equals and those unequal differently (horizontal inequity and vertical redistribution). Horizontal inequity is caused by taste differences among similar households, but some excises are designed to reflect social, not revealed, preferences. We apply two methodologies for decomposing the overall redistributive effect of the present and three alternative indirect tax structures into vertical and horizontal effects for Greece, using the Household Expenditure Survey micro-database. In all cases the taste component is considerable, even when we allow for social preferences, while improvements in vertical redistribution can be achieved, albeit at the cost of increased horizontal inequity.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0806.
Date of creation: Jan 2008
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Web page: http://www.econ.cam.ac.uk/index.htm
distributional effect of taxes; horizontal inequality; vertical redistribution; indirect tax reform; Greece.;
Other versions of this item:
- Georgia Kaplanoglou & David M. Newbery, 2008. "Horizontal Inequity and Vertical Redistribution with Indirect Taxes: The Greek Case," Fiscal Studies, Institute for Fiscal Studies, vol. 29(2), pages 257-284, 06.
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- D30 - Microeconomics - - Distribution - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-06-13 (All new papers)
- NEP-EEC-2008-06-13 (European Economics)
- NEP-PBE-2008-06-13 (Public Economics)
- NEP-PUB-2008-06-13 (Public Finance)
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