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Are Income Floors Viable In Sub-Saharan Africa?

Author

Listed:
  • Jon Jellema

    (CEQ Institute)

  • Nora Lustig

    (Stone Center for Latin American Studies, Department of Economics, Tulane University, Commitment to Equity Institute (CEQI))

  • Valentina Martinez Pabon

Abstract

In this paper, we build on results generated from policy scenarios attempting to generate sufficient internal resources for providing targeted and universal basic income packages in 9 different countries in sub-Saharan Africa. We add more countries from the same region as well as account explicitly for "missing" incomes, subsidy expenditures, and tax revenues in a way that reduces the burden of increased revenue collection on the survey population). While the new scenarios create smaller burdens from increased revenue collection on poor and vulnerable populations, it is still the case that setting income floors equivalent to international poverty lines funded by internally-generated revenues is often not feasible for two reasons: there is extreme reranking of individuals (from pre- to post-fiscal income) and the tax burden on the nonpoor would be significantly higher.

Suggested Citation

  • Jon Jellema & Nora Lustig & Valentina Martinez Pabon, 2019. "Are Income Floors Viable In Sub-Saharan Africa?," Commitment to Equity (CEQ) Working Paper Series 86, Tulane University, Department of Economics.
  • Handle: RePEc:tul:ceqwps:86
    as

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    File URL: http://repec.tulane.edu/RePEc/ceq/ceq86.pdf
    File Function: First version, 2019
    Download Restriction: no

    References listed on IDEAS

    as
    1. Filip Novokmet & Thomas Piketty & Gabriel Zucman, 2018. "From Soviets to oligarchs: inequality and property in Russia 1905-2016," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 189-223, June.
    2. Thomas Piketty & Li Yang & Gabriel Zucman, 2019. "Capital Accumulation, Private Property, and Rising Inequality in China, 1978–2015," American Economic Review, American Economic Association, vol. 109(7), pages 2469-2496, July.
    3. Filip Novokmet & Thomas Piketty & Gabriel Zucman, 2018. "From Soviets to oligarchs: inequality and property in Russia 1905-2016," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 189-223, June.
    4. Moore, Mick & Prichard, Wilson & Fjeldstad, Odd-Helge, 2018. "Taxing Africa: Coercion, Reform and Development," Working Papers 13997, Institute of Development Studies, International Centre for Tax and Development.
    5. Thomas Piketty & Nancy Qian, 2009. "Income Inequality and Progressive Income Taxation in China and India, 1986-2015," American Economic Journal: Applied Economics, American Economic Association, vol. 1(2), pages 53-63, April.
    6. Carbonnier, Clement, 2007. "Who pays sales taxes? Evidence from French VAT reforms, 1987-1999," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1219-1229, June.
    7. De La Fuente,Alejandro & Rosales,Manuel & Jellema,Jon Robbert, 2017. "The impact of fiscal policy on inequality and poverty in Zambia," Policy Research Working Paper Series 8246, The World Bank.
    8. Carbonnier, Clement, 2007. "Who pays sales taxes? Evidence from French VAT reforms, 1987-1999," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1219-1229, June.
    9. David Coady & Valentina Flamini & Louis Sears, 2015. "The Unequal Benefits of Fuel Subsidies Revisited; Evidence for Developing Countries," IMF Working Papers 15/250, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    fiscal impoverishment; fiscal policy; fiscal incidence; social spending; inequality; poverty; taxes;

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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