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Taxes, income and economic mobility in Ireland: New evidence from tax records data

Author

Listed:
  • Seán Kennedy
  • Yosuke Jin

    (OECD)

  • David Haugh

    (OECD)

  • Patrick Lenain

    (OECD)

Abstract

This paper analyses income inequality in Ireland using a new panel dataset based on the administrative tax records of the Revenue Commissioners for Ireland. High inequality at market incomes in Ireland by international standards appears to be driven by both ends of the income distribution. An analysis of income mobility over time shows it has been low at both ends of the income distribution, though it increased at the low end once the crisis began, reflecting the sharp deterioration of the labour market. The data confirms that the tax system is highly progressive at the high end of income distribution and the welfare system provides the most significant support to lower income deciles in Ireland. The redistributive function in the tax and benefit system was enhanced during the last decade, not only because more income support was necessitated with the crisis, but also because of steeper and more progressive tax rates. This working paper relates to the 2015 OECD Economic Survey of Ireland (www.oecd.org/eco/surveys/economic-survey-ireland. Les impôts, le revenu et la mobilité économique en Irlande : Nouvelles preuves à partir des données des dossiers fiscaux Ce document analyse l’inégalité de revenus en Irlande à l’aide d’un dataset panel construit à la base des déclarations fiscales du Revenue Commissioners de l’Irlande. La forte inégalité du revenu initial en Irlande par rapport aux normes internationales apparait être dirigée par les deux extrémités de la distribution des revenus. Une analyse de la mobilité économique (à travers de la distribution des revenus) dans le temps montre qu’elle était faible aux deux extrémités de la distribution des revenus, mais elle a accru à l’extrémité inférieure de la distribution une fois la crise a commencé, en reflétant la forte détérioration du marché du travail. Les données confirment que le système fiscal est hautement progressif à l’extrémité supérieure de la distribution des revenus et le système de protection sociale fournit le soutien le plus important au sein de déciles de revenu inférieurs en Irlande. Le fonctionnement redistributif du système d’imposition et de protection sociale a été renforcé dans la dernière décennie, non seulement car la crise a nécessité plus de soutien du revenu, mais aussi en raison des taux d’imposition rendus plus accentués et progressifs. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de Irlande 2015 (www.oecd.org/fr/eco/etudes/etude-economique-irlande.htm).

Suggested Citation

  • Seán Kennedy & Yosuke Jin & David Haugh & Patrick Lenain, 2015. "Taxes, income and economic mobility in Ireland: New evidence from tax records data," OECD Economics Department Working Papers 1269, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:1269-en
    DOI: 10.1787/5jrqc6zlgq31-en
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    References listed on IDEAS

    as
    1. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
    2. Auten, Gerald & Gee, Geoffrey, 2009. "Income Mobility in the United States: New Evidence From Income Tax Data," National Tax Journal, National Tax Association;National Tax Journal, vol. 62(2), pages 301-328, June.
    3. Congressional Budget Office, 2012. "The Distribution of Household Income and Federal Taxes, 2008 and 2009," Reports 43373, Congressional Budget Office.
    4. David Haugh & Yosuke Jin & Alberto González Pandiella, 2016. "Growing together: Towards a more inclusive Ireland," OECD Economics Department Working Papers 1293, OECD Publishing.
    5. Congressional Budget Office, 2012. "The Distribution of Household Income and Federal Taxes, 2008 and 2009," Reports 43373, Congressional Budget Office.
    6. Congressional Budget Office, 2012. "The Distribution of Household Income and Federal Taxes, 2008 and 2009," Reports 43373, Congressional Budget Office.
    7. Brian Nolan & Bertrand Maitre & Sarah Voitchovsky & Christopher Whelan, 2012. "GINI DP 70: Inequality and Poverty in Boom and Bust: Ireland as a Case Study," GINI Discussion Papers 70, AIAS, Amsterdam Institute for Advanced Labour Studies.
    8. Congressional Budget Office, 2012. "The Distribution of Household Income and Federal Taxes, 2008 and 2009," Reports 43373, Congressional Budget Office.
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    Cited by:

    1. Callan, Tim & Doorley, Karina & McTague, Alyvia, 2020. "Top Incomes in Ireland: Reconciling Evidence from Tax Records and Household Survey Data," IZA Discussion Papers 13585, Institute of Labor Economics (IZA).
    2. Oliver Denk, 2015. "Who are the top 1% earners in Europe?," OECD Economics Department Working Papers 1274, OECD Publishing.
    3. Bercholz, Maxime & Bergin, Adele & Callan, Tim & Garcia Rodriguez, Abian & Keane, Claire, 2019. "A micro-macro economic analysis of pension auto-enrolment options," Papers WP640, Economic and Social Research Institute (ESRI).

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    More about this item

    Keywords

    distribution des revenus; impôt sur le revenu; income distribution; income tax; prestations sociales; social benefits; tax credit;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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