2022
DOI: 10.26504/qec2022win_sa_doolan
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Distributional impact of tax and welfare policies: Budget 2023

Abstract: Budget 2023 was focused on providing relief to households experiencing reduced purchasing power due to rapid inflation, which is predicted to persist into 2023. In this Special Article we analyse the distributional impact of these reforms. Budget 2023 was unusual as many reforms were one-off measures specifically addressed at combatting cost of living pressures. Compared to a price-indexed 2022 baseline, Budget 2023 left households across the income distribution better off, with the lowest 10 per cent of house… Show more

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Cited by 5 publications
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“…The current rapid rise in fuel and other prices has had a greater proportionate impact on households in the lowest quintile of the income distribution (Barrett et al, 2022). One-off measures in Budget 2023 are estimated to significantly cushion incomes, especially for those in lower-income households, raising challenges in helping low-income families to avoid fuel poverty when these measures lapse (Doolan, Doorley, Regan and Roantree, 2022).…”
Section: Implications For Policymentioning
confidence: 99%
“…The current rapid rise in fuel and other prices has had a greater proportionate impact on households in the lowest quintile of the income distribution (Barrett et al, 2022). One-off measures in Budget 2023 are estimated to significantly cushion incomes, especially for those in lower-income households, raising challenges in helping low-income families to avoid fuel poverty when these measures lapse (Doolan, Doorley, Regan and Roantree, 2022).…”
Section: Implications For Policymentioning
confidence: 99%
“…Budget 2023 insulated households, on average, from expected inflation in 2023 through a range of permanent and one-off measures (Doolan et al, 2022). The February COL package -which contains further temporary measures -benefits low-income households relatively more than high income households.…”
Section: Box B the Distributional Impact Of The February Cost-of-livi...mentioning
confidence: 99%
“…This is particularly the case given the approach of the Government in response to increases in the cost of living, which has placed particular emphasis on a mix of universal and targeted once-off payments. While this represents a coherent approach to the sharp rise in energy prices (providing support that is timed to coincide with the arrival of energy bills), Doolan et al (2022a) showed that the adequacy of core social welfare payments risks being eroded unless these once-off measures are repeated or the level of social welfare payments and tax credits revisited in the coming years: for example, through a benchmarking exercise like that recommended by the Commission on Taxation and Welfare (2022) or a series of real (above inflation) increases once the rate of inflation has returned to more normal levels. Despite the large fiscal surpluses projected over the coming years, maintaining the adequacy of the social welfare system so that it contributes toward inclusive growth will pose a challenge for this and future Governments given the pressures on the public finances from maintaining even the existing level of services and the reliance on windfallpotentially transitory -receipts from corporation tax (Irish Fiscal Advisory Council, 2023).…”
Section: Notementioning
confidence: 99%