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Tax-Benefit Revealed Redistributive Preferences Over Time: Ireland 1987-2005

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  • Bargain, Olivier

    () (University of Bordeaux)

  • Keane, Claire

    () (ESRI, Dublin)

Abstract

By inverting Saez (2002)'s model of optimal income taxation, we characterize the redistributive preferences of the Irish government between 1987 and 2005. The (marginal) social welfare function revealed by this approach is consistently comparable over time and show great stability despite profound changes in market incomes and important fiscal reforms over the period. Results are robust to numerous checks regarding data, income concepts and elasticities. A comparison with the UK shows marked differences reflecting the narrow political spectrum in Ireland compared to radical changes in British politics over the past 30 years. Some "anomalies" in the revealed social welfare function suggests introducing transfers to the working poor.

Suggested Citation

  • Bargain, Olivier & Keane, Claire, 2010. "Tax-Benefit Revealed Redistributive Preferences Over Time: Ireland 1987-2005," IZA Discussion Papers 5221, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5221
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    Cited by:

    1. Immervoll, Herwig & Richardson, Linda, 2011. "Redistribution Policy and Inequality Reduction in OECD Countries: What Has Changed in Two Decades?," IZA Discussion Papers 6030, Institute for the Study of Labor (IZA).
    2. Spencer Bastani & Jacob Lundberg, 2016. "Political Preferences for Redistribution in Sweden," CESifo Working Paper Series 6205, CESifo Group Munich.
    3. Bastani, Spencer & Lundberg, Jacob, 2016. "Political preferences for redistribution in Sweden," Working Paper Series 2016:13, Uppsala University, Department of Economics.
    4. Tajika, Tomoya, 2015. "Japanese government and utilitarian behavior," Journal of the Japanese and International Economies, Elsevier, vol. 36(C), pages 90-107.
    5. Benjamin B. Lockwood & Matthew Weinzierl, 2014. "Positive and Normative Judgments Implicit in U.S. Tax Policy, and the Costs of Unequal Growth and Recessions," Harvard Business School Working Papers 14-119, Harvard Business School, revised Oct 2014.
    6. repec:eee:pubeco:v:156:y:2017:i:c:p:81-100 is not listed on IDEAS
    7. repec:kap:jecinq:v:15:y:2017:i:4:d:10.1007_s10888-017-9368-4 is not listed on IDEAS

    More about this item

    Keywords

    optimal taxation; social preferences; labour supply;

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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