The impact of tax policy on the welfare state
AbstractThe paper seeks to find the impact of tax policy on income and wealth redistribution, as well as its effects on welfare. Redistribution through transfers has a major contribution to reducing inequality and polarization of income. The fiscal reforms in present-day circumstances imply as outcome the so called “tax uniformity”, embedding income redistribution through budgetary mechanisms, an arrangement that greatly depends on the alternative chosen by the authorities for the distribution of tax burden among various categories of contributors. In Eastern European economies, under the absence of a sustainable economic growth and structural reforms, flat taxes can lead to polarization of income. The authors argue that if progressive rates are feasible in eastern countries, taxation reconsideration generates economic effects triggered by the change in tax burden and social effects triggered by a decrease in the unemployment, living conditions, education and labour.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 40347.
Date of creation: 2012
Date of revision:
tax policy; redistribution; flat tax; progressive rates; welfare state;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
This paper has been announced in the following NEP Reports:
- NEP-ACC-2012-08-23 (Accounting & Auditing)
- NEP-ALL-2012-08-23 (All new papers)
- NEP-MAC-2012-08-23 (Macroeconomics)
- NEP-PBE-2012-08-23 (Public Economics)
- NEP-PUB-2012-08-23 (Public Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Voinea, Liviu & Mihaescu, Flaviu, 2009. "The Impact of the Flat Tax Reform on Inequality - the case of Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 19-41, December.
- Molnar, Maria, 2011. "Income Polarization In Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 64-83, June.
- Maria Ana Lugo, 2005. "Comparing Multidimensional Indices of Inequality: methods and application," Working Papers 14, ECINEQ, Society for the Study of Economic Inequality.
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