We apply a standard tax and benefit incidence analysis to estimate the impact on inequality and poverty of direct taxes, indirect taxes and subsidies, and social spending (cash and food transfers and in-kind transfers in education and health). The extent of inequality reduction induced by direct taxes and transfers is rather small (2 percentage points on average) especially when compared with that found in Western Europe (15 percentage points on average). What prevents Argentina, Bolivia and Brazil from achieving similar reductions in inequality is not the lack of revenues but the fact that they spend less on cash transfersespecially transfers that are progressive in absolute terms-as a share of GDP. Indirect taxes result in that net contributors to the fiscal system start at the fourth, third and even second decile on average, depending on the country. When in-kind transfers in education and health are added, however, the bottom six deciles are net recipients. The impact of transfers on inequality and poverty reduction could be higher if spending on direct cash transfers that are progressive in absolute terms is increased, leakages to the nonpoor are reduced and coverage of the extreme poor by direct transfer programs is expanded.
La construcción de la línea de pobreza es el paso más crítico y difícil en la medición de la pobreza, pues establece el umbral que define quién es o no es pobre. En el presente documento se establecen los criterios y se utiliza la información disponible para construir Canastas Básicas Alimentarias a partir de la Encuesta Continua de Hogares 2003-2004, y se obtiene una valoración de dichas canastas con los precios del IPC base 2007. A partir de las Canastas Básicas Alimentarias se estimaron las líneas de pobreza extrema y moderada para las ciudades de Santa Cruz, La Paz y Cochabamba, así como para el resto urbano y el área rural de Bolivia para el periodo 1999-2012. Las actuales estimaciones de pobreza monetaria en Bolivia aún tienen como referencia la canasta básica de alimentos construida en 1995, bajo un contexto de mayor restricción y escasez de información acerca de patrones de consumo, una estructura demográfica de hace dos décadas y criterios desactualizados sobre las necesidades nutricionales.
We apply a standard tax and benefit incidence analysis to estimate the impact on inequality and poverty of direct taxes, indirect taxes and subsidies, and social spending (cash and food transfers and in-kind transfers in education and health). The extent of inequality reduction induced by direct taxes and transfers is rather small (2 percentage points on average) especially when compared with that found in Western Europe (15 percentage points on average). What prevents Argentina, Bolivia and Brazil from achieving similar reductions in inequality is not the lack of revenues but the fact that they spend less on cash transfersespecially transfers that are progressive in absolute terms-as a share of GDP. Indirect taxes result in that net contributors to the fiscal system start at the fourth, third and even second decile on average, depending on the country. When in-kind transfers in education and health are added, however, the bottom six deciles are net recipients. The impact of transfers on inequality and poverty reduction could be higher if spending on direct cash transfers that are progressive in absolute terms is increased, leakages to the nonpoor are reduced and coverage of the extreme poor by direct transfer programs is expanded.
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