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Redistributive Effect of U.S. Taxes and Public Transfers, 1994-2004

  • Kinam Kim

    (Ministry for Health, Welfare and Family Affairs, Republic of Korea)

  • Peter J. Lambert

    (University of Oregon)

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    In this study, the authors derive measures of the redistributive effect of taxes and welfare expenditures for the United States using Current Population Survey data for the years 1994, 1999, and 2004. The authors find that while income inequality increased, the redistributive effect of taxes and public transfers together reduced market income inequality by approximately 30 percent. In 2004, 88 percent of the net redistributive effect resulted from public transfers and 12 percent from taxes. The total redistributive effect would have improved by 35 percent in 2004 if horizontal inequities in taxes and public transfers could have been eliminated.

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    File URL: http://pfr.sagepub.com/content/37/1/3.abstract
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    Article provided by in its journal Public Finance Review.

    Volume (Year): 37 (2009)
    Issue (Month): 1 (January)
    Pages: 3-26

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    Handle: RePEc:sae:pubfin:v:37:y:2009:i:1:p:3-26
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    6. Wallace E. Oates, 2007. "On the Theory and Practise of Fiscal Decentralization," Working Papers 0701, CREI Università degli Studi Roma Tre, revised Jan 2007.
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