The effects of the tax mix on inequality and growth

Abstract

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.ECO/WKP(2017)79 Unclassified English -Or. English ECO/WKP(2017)79 2 OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s).Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the OECD works.

OECD Economics Department Working Papers

“…43 Employees' social SSC are also covered by the redistribution measure but they are not the focus here because : i) their redistributive effect is negligible, in fact in some countries they tend to be regressive (Causa and Hermansen, 2017), ii) a proper analysis of income redistribution through SSC should take into account both employers and employees SSC which is not possible with the redistribution measure at-hand, and, finally iii) a life-cycle perspective would ideally better uncover redistribution through SSC. 44 See Akgun et al (2017) for an analysis on the effect of the tax mix on disposable income inequality. 45 In theory, the progressivity of the whole tax system should be assessed but in practice only PIT (and SSC) progressivity measures are available.…”

“…A 1 percentage point change in tax revenue share from PIT is a relatively modest change from a crosscountry perspective, as the current standard deviation across OECD countries is equal to 10 %, with countries like Denmark raising more than half of tax revenue from PIT and countries like the Czech Republic raising five times less than that. 58 54 Akgun et al (2017), Arnold et al (2011).…”

“…55 Akgun et al (2017) provide an empirical analysis of the effects of the tax mix on growth and inequality in disposable income. Brys et al (2016) provide a comprehensive qualitative overview of tax design for inclusive growth.…”

“…form of higher tax wedges on above average income earners, is linked with lower longterm output (Akgun et al 2017).…”

An empirical investigation on the drivers of income redistribution across OECD countries

“…A 1 percentage point change in tax revenue share from PIT is a relatively modest change from a crosscountry perspective, as the current standard deviation across OECD countries is equal to 10 %, with countries like Denmark raising more than half of tax revenue from PIT and countries like the Czech Republic raising five times less than that. 58 54 Akgun et al (2017), Arnold et al (2011). 55 Akgun et al (2017) provide an empirical analysis of the effects of the tax mix on growth and inequality in disposable income.…”