Measuring the Redistributive Capacity of Tax Policies

Author/Editor:

Charles Vellutini ; Juan Carlos Benitez

Publication Date:

October 22, 2021

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

This paper presents a novel technique to measure and compare the redistributive capacity of observed tax (or transfer) policies. The technique is based on income distribution simulations and controls for differences in pre-tax income distributions. It assumes that the only information on the pre-tax distribution available in each country-year is the Gini coefficient and the mean (GDP per capita). We illustrate the technique with an application to the personal income tax, using a dataset of 108 countries over the 2007-2018 period.

Series:

Working Paper No. 2021/252

Subject:

Frequency:

regular

English

Publication Date:

October 22, 2021

ISBN/ISSN:

9781589064089/1018-5941

Stock No:

WPIEA2021252

Pages:

28

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