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Taxes, Income and Economic Mobility in Ireland: New Evidence from Tax Records Data

Author

Listed:
  • Seán Kennedy

    (Revenue Commissioners, Dublin, Ireland)

  • Yosuke Jin

    (Organisation for Economic Co-operation and Development, Paris, France)

  • David Haugh

    (Organisation for Economic Co-operation and Development, Paris, France)

  • Patrick Lenain

    (Organisation for Economic Co-operation and Development, Paris, France)

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 of 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, although it increased at the low end once the crisis began, reflecting the sharp deterioration of the labour market. The data confirms that the income 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 due to reforms which made the statutory tax rate more progressive.

Suggested Citation

  • Seán Kennedy & Yosuke Jin & David Haugh & Patrick Lenain, 2016. "Taxes, Income and Economic Mobility in Ireland: New Evidence from Tax Records Data," The Economic and Social Review, Economic and Social Studies, vol. 47(1), pages 109-153.
  • Handle: RePEc:eso:journl:v:47:y:2016:i:1:p:109-153
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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. Congressional Budget Office, 2012. "The Distribution of Household Income and Federal Taxes, 2008 and 2009," Reports 43373, Congressional Budget Office.
    3. 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.
    4. 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.
    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. David Haugh & Yosuke Jin & Alberto González Pandiella, 2016. "Growing together: Towards a more inclusive Ireland," OECD Economics Department Working Papers 1293, OECD Publishing.
    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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    Citations

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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

    income inequality; Ireland; quantitative methods; tax;
    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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