The redistributive potential of taxation in Latin America

Bibliographic Data

ID11650596
AuthorsMichael Hanni, Michael Stephen Hanni, Ricardo Martner, Andrea Podestá
Year2016
Volume2015
Issue116
Pages7-26
Publication date2016-03-28
Open AccessNo
TypeARTICLE
VenueCEPAL review (JOURNAL)
Journal identifiersISSN: 0251-2920 • E-ISSN: 1684-0348
PublisherUnited Nations Publications (PUBLISHER • US)
DOI10.18356/4bfdcb5d-en
OpenAlexW2249761848
LanguageEN
Citations received6
References cited2

This study uses internationally comparable methodologies to analyse the distributional impact of income tax and public transfers in 17 countries of Latin America. The results indicate that fiscal policy plays a limited role in improving the distribution of disposable income; the Gini coefficient decreased by barely three percentage points after direct fiscal action. On average, 61% of this reduction was due to public cash transfers and the rest to direct taxes, reflecting the pressing need for personal income tax to be strengthened. Analysis of household surveys gives an indication of the potential effects of tax reforms aimed at increasing the average effective tax rate of the top income decile. Allocating this additional revenue to targeted transfers would produce significant results. Consequently, tax reforms must be evaluated bearing in mind how those resources are used

Economics · Geography · Latin Americans · Political science · Welfare economics · Fiscal Policy and Economic Growth · Income, Poverty, and Inequality · Taxation and Compliance Studies

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