Distributive impacts of alternative tax structures. The case of Uruguay
AbstractThis article considers the distributional impact of different changes in Uruguayan tax system, using a static micro-simulation framework based on the combination of data from household and expenditure surveys. On the indirect taxes side, we consider two alternatives that imply the same reduction in tax revenue: a general reduction of 2 points in the VAT basic rate, and a selective reduction in the VAT rate applied to specific goods that make up a large share of consumption of low income population. In relation to direct taxes, we consider the effects of increasing the upper limit of the tax free zone of the labor component of the dual income tax. We analyze separately the impact of each of these changes, and we also simulate a joint scenario including changes in direct and indirect taxes. Our results indicate that redistribution through the analyzed modifications in direct and indirect taxes in Uruguay is limited.
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Bibliographic InfoPaper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 0911.
Length: 23 pages
Date of creation: Jun 2011
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Retail; fiscal redistribution; income inequality; taxes;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-22 (All new papers)
- NEP-CMP-2011-08-22 (Computational Economics)
- NEP-PBE-2011-08-22 (Public Economics)
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