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Taxation Reform and Income Distribution in Australia

Author

Listed:
  • G. A. Meagher
  • Nisha Agrawal

Abstract

This article contains an analysis of the effects of changes in the existing tax mix on the distribution of income in Australia. Shifts from direct to indirect taxes, similar to ‘Option C’ in the Government's Draft White Paper on tax reform, are considered. The general equilibrium effects of the policy changes are analysed using an extended version of the ORANI model of the Australian economy. The Shorrocks I0 index is then used to identify the sources of inequality in the pre‐ and post‐change distributions. The results are based on data from the ABS Income and Housing Survey for 1981–82.

Suggested Citation

  • G. A. Meagher & Nisha Agrawal, 1986. "Taxation Reform and Income Distribution in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 19(3), pages 33-56, September.
    • Handle: RePEc:bla:ausecr:v:19:y:1986:i:3:p:33-56
    DOI: 10.1111/j.1467-8462.1986.tb00632.x
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    File URL: https://doi.org/10.1111/j.1467-8462.1986.tb00632.x
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    References listed on IDEAS

    as
    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    2. repec:bla:ecorec:v:62:y:1986:i:179:p:427-41 is not listed on IDEAS
    3. G. A. Meagher & Peter B. Dixon, 1986. "Analyzing Income Distribution in Australia," The Economic Record, The Economic Society of Australia, vol. 62(4), pages 427-441, December.
    4. repec:bla:ecorec:v:56:y:1980:i:154:p:209-21 is not listed on IDEAS
    5. B. R. Parmenter & G. A. Meagher, 1985. "Policy Analysis Using a Computable General Equilibrium Model: A Review of Experience at the IMPACT Project," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 18(1), pages 3-15, March.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Verikios, George & Zhang, Xiao-guang, 2013. "The distributional effects of the Hilmer reforms on the Australian gas industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(2), pages 1-19.
    2. Luca Tiberti & John Cockburn & Martín Cicowiez, 2017. "A top-down behaviour (TDB) microsimulation toolkit for distributive analysis," Working Papers PMMA 2017-24, PEP-PMMA.
    3. Verikios, George & Zhang, Xiao-guang, 2013. "Structural change in the Australian electricity industry during the 1990s and the effect on household income distribution: A macro–micro approach," Economic Modelling, Elsevier, vol. 32(C), pages 564-575.
    4. Maheshwar Rao & Robert Tanton & Yogi Vidyattama, 2013. "‘A Systems Approach to Analyse the Impacts of Water Policy Reform in the Murray-Darling Basin: a conceptual and an analytical framework’," NATSEM Working Paper Series 13/22, University of Canberra, National Centre for Social and Economic Modelling.
    5. Luca Tiberti & Martin Cicowiez & John Cockburn, 2018. "A Top-Down with Behaviour (TDB) Microsimulation Toolkit for Distributive Analysis," International Journal of Microsimulation, International Microsimulation Association, vol. 11(2), pages 191-213.
    6. George Verikios & Xiao-guang Zhang, 2010. "Structural Change in the Australian Electricity Industry During the 1990s and the Effect on Household Income Distribution," Centre of Policy Studies/IMPACT Centre Working Papers g-207, Victoria University, Centre of Policy Studies/IMPACT Centre.
    7. George Verikios & Xiao-guang Zhang, 2012. "Microeconomic Reform and Income Distribution: The case of Australian Ports and Rail Freight Industries," Centre of Policy Studies/IMPACT Centre Working Papers g-230, Victoria University, Centre of Policy Studies/IMPACT Centre.
    8. B. R. Parmenter & Matthew W. Peter, 1991. "A Reinterpretation of the CIE Projections of the Long‐Run Economic Effects of Immigration," The Economic Record, The Economic Society of Australia, vol. 67(4), pages 331-337, December.

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