What Explains the Redistribution Achieved by the Italian Personal Income Tax? Evidence from Administrative Data

Barbetta, Gianpaolo; Pellegrino, Simone; Turati, Gilberto

doi:10.1177/1091142116651488

Cited by 10 publications

(5 citation statements)

References 21 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…analyse the distributional impact and the collateral consequences of tax expenditures showing that "the interactions of tax expenditures will be one of the most difficult aspects of any reform effort". Burman and Phaup (2012) points out how classifying tax expenditures as tax cuts rather than spending has led over time to higher taxes, bigger government, and an inefficient spending mix due to too much tax spending; Barbetta et al (2018) analyzing the Italian personal income tax shows that it is only a few major tax expenditures (the tax credit for employment and retirement income) that determine the total redistributive effect, while on the contrary most minor expenditures have no significant impact on redistribution.…”

Section: Literaturementioning

confidence: 99%

Assessing tax expenditures: a composite measure for sustainability, fairness and territorial equity in Italy

Marè,

Porcelli,

Vidoli

2024

Preprint

View full text Add to dashboard Cite

Over the last 30 years, the number of studies on tax expenditures has gradually increased in most OECD countries: given their importance for tax systems, most countries have decided to estimate revenue issues on a regular basis. Most of these studies have looked at issues such as the loss of tax revenue due to tax expenditures and their distributional effects across income groups. No specific studies have been carried out on the rationale to attribute a composite criterion of fiscal sustainability and inter-territorial equity, in order to monitor over the years the performance of each item in relation to the public budget. In this paper a first empirical attempt is proposed in the Italian context. For each tax detraction, a composite indicator is calculated for the dimensions of progressivity, relevance and territorial equity, in order to highlight an objective criterion useful for rationalising tax expenditure. Our analysis shows that there is room for rationalisation in the number and size of tax expenditures facing a clear correlation between the geographical distribution of some tax expenditures.

show abstract

Section: Literaturementioning

confidence: 99%

Assessing tax expenditures: a composite measure for sustainability, fairness and territorial equity in Italy

Marè,

Porcelli,

Vidoli

2024

Preprint

View full text Add to dashboard Cite

show abstract

“…Additional reductions are available for parents of young children, working mothers, discharged soldiers and many other categories. The credits along with marginal tax rates contribute to a more equitable distribution of income (Barbetta et al, 2018).…”

Section: Other Changesmentioning

confidence: 99%

Reforms to the Israeli income tax

Tzarfati¹

2023

REF

View full text Add to dashboard Cite

Income tax is a major component of state revenues, earmarked to finance the services provided by the government. Income taxes have a significant impact, among other things, on economic growth and income distribution. According to economic theory, personal income tax—perceived as progressive tax—is the main policy tool of the governments of developed countries and is aimed at reducing inequality in income distribution. The Israeli in- come tax has been through major reforms in the last decade and a half. These reforms include a reduction in income tax exemp- tions, steadily decreasing tax rates, simplification of tax calculation rules, reallocation of resources from the public and revenue sharing by reducing the income tax burden on the middle classes, a transfer from territorially based taxation of income earned or accrued in Israel to personally based taxation of income of Israeli residents, regardless of the place of earning the income. The result of changing the tax system and the transition to taxation on a personal basis means, in practice, an expansion of the tax base in Israel. This paper aims to describe the income tax prior to the reforms and the major reforms that had taken place up to 2017.

show abstract

“…They found that, while the distributional effects of deductions vary substantially, the overall net effect of tax expenditure for individual income tax is regressive. Barbetta et al ( 2018 ) used administrative data to analyze the redistributive effects of Italy’s PIT and showed that itemized deductions tend to have little notable impact on income redistribution. Despite its importance, our understanding of the topic remains limited, and the few studies in the literature do not offer a consensus on income taxation’s redistributive impact.…”

Section: Literature On Personal Income Tax Deductionsmentioning

confidence: 99%

“…While itemized deductions are traditionally thought to favor wealthier families in anecdotal narratives, mixed findings occur on this line of inquiry when different PIT systems are presented in different policy settings. Barbetta et al ( 2018 ) believe that most of the itemized expenditures in Italian PIT do not show any sizable impact on redistribution. Cauble ( 2017 ) argues that Trump’s U.S. tax reform may see itemized deductions disproportionately benefitting higher-income individuals even with the increase in the standard deduction and the elimination or reduction in various itemized deductions.…”

Section: Personal Income Tax In Taiwanmentioning

confidence: 99%

Which Families Benefited from the Recent Personal Income Tax Reform in Taiwan: Evidence from the Administrative Data

Chou

2021

J Fam Econ Iss

View full text Add to dashboard Cite

This paper examines the changes in vertical equity across different types of tax filing families during the span of a series of drastic personal income tax reforms in Taiwan. The newly enacted 2016 Taxpayer Rights Protection Act has brought unprecedented challenges to the tax authority’s distributional goal and revenue stability. Utilizing the administrative tax return data collected by the Ministry of Finance’s Fiscal Information Agency between 2016 and 2018, we show that while the income tax has contributed to improving equality in income distribution, the effects, however, were limited and even declined slightly in recent years. We also found that distributions of tax benefits are generally regressive, especially among itemized and special deductions. It is also shown that the personal exemption and the adjustments of basic living expenses provided comparably more relief to households with dependents than to those claiming no dependents. According to our two-parameter metric encompassing the usage rates and the tax-benefit distributions for each deduction, we found that itemized deductions and special deductions, in general, are regressive. Specifically, we calculate and compare different representative families’ tax payments before and after the reform. While the tax reform has helped reduce many tax-filing families’ tax liabilities, most tax benefits generated from the expansion of exemptions and deductions would likely be enjoyed by families with higher incomes. In a broader reform-minded context, the analysis cautions the tax authority in Taiwan and equity pursuing policy makers in other countries not to prioritize an overarching short-term equity goal over long-term revenue stabilization. Phasing out or capping some of the itemized deductions such as donations and special deductions related to discretionary purchasing decisions looks to be a promising reform path toward improving equity and restoring revenue stability.

show abstract

What Explains the Redistribution Achieved by the Italian Personal Income Tax? Evidence from Administrative Data

Cited by 10 publications

References 21 publications

Assessing tax expenditures: a composite measure for sustainability, fairness and territorial equity in Italy

Assessing tax expenditures: a composite measure for sustainability, fairness and territorial equity in Italy

Reforms to the Israeli income tax

Which Families Benefited from the Recent Personal Income Tax Reform in Taiwan: Evidence from the Administrative Data

Contact Info

Product

Resources

About