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The Contribution of Proportional Taxes and Tax-Free Cash Benefits to Income Redistribution over the Period 2005-2018: Evidence from Italy

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  • Stefano Boscolo

Abstract

During the last two decades a growing interest in understanding what determines the redistributive role of tax-benefit systems has been recorded worldwide. For the case of Italy, the previous analyses were mainly focused on quantifying the contribution of marginal tax rates, deductions and tax credits to the redistributive capacity of PIT, neglecting the effect on income redistribution of proportional taxes and income sources exempt from taxation such as tax-free cash benefits. The following paper aims to fill this gap by applying two alternative Gini-based decomposition methodologies (Onrubia et al., 2014; Urban, 2014) to the Italian tax-benefit system’s redistributive power over the period 2005-2018. The contribution of each tax-benefit instrument is quantified for several baseline policy scenarios which diverge from each other for being representative of different degrees of extension of the tax-benefit system under study.

Suggested Citation

  • 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".
    • Handle: RePEc:mod:depeco:0152
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    Cited by:

    1. Stefano Boscolo, 2020. "On the Horizontal Inequity Effect of the Erosion of the PIT Base: The Case of Italy," Department of Economics 0176, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".

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    More about this item

    Keywords

    tax-benefit system; progressive taxation; decomposition approach; redistribution; EUROMOD;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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