IDEAS home Printed from https://ideas.repec.org/p/ldr/wpaper/215.html
   My bibliography  Save this paper

Exploring a negative income tax for South Africa: impacts on income inequality and poverty

Author

Listed:
  • Emma Helen Rasmussen

    (Southern Africa Labour and Development Research Unit, School of Economics, University of Cape Town)

Abstract

This paper explores the potential of a negative income tax to tackle South Africa's dual challenges of poverty and income inequality. Using a static, arithmetic microsimulation model with NIDS Wave 4 as the base dataset, we simulate a negative income tax in which recipients receive an income subsidy proportional to their income if it is below a set amount and a guaranteed subsidy if they have zero income. Two different sizes for the guaranteed subsidy are simulated, both pegged to recent poverty lines. The simulations show that the negative income tax significantly reduces both inequality and poverty levels, but that this necessarily comes at a high cost.

Suggested Citation

  • Emma Helen Rasmussen, 2017. "Exploring a negative income tax for South Africa: impacts on income inequality and poverty," SALDRU Working Papers 215, Southern Africa Labour and Development Research Unit, University of Cape Town.
    • Handle: RePEc:ldr:wpaper:215
    as

    Download full text from publisher

    File URL: https://www.opensaldru.uct.ac.za/handle/11090/899
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ldr:wpaper:215. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alison Siljeur (email available below). General contact details of provider: https://edirc.repec.org/data/sauctza.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.