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To What Extent Do Social Benefits and Income Tax Alter Income Distribution in Poland?

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  • Ewa Aksman

Abstract

The paper aims at evaluating redistributive effect of personal income tax and social benefits in Poland, i.e. redistributive impact of net tax. In this study, the Lorenz Curve approach, including income distribution parameters is applied; the fiscal system redistributive effect is measured in relative terms and the Kakwani decomposition is used. The methodology is applied to the data of Polish households in the period 2008−2013 (in each year, the size of the empirical sample is about 37 000 units). The performed analysis showed that tax-benefit system reduced income inequality by 19.84% on average. The net tax redistributive impact was mainly the result of large redistributive influence of social benefits, whereas redistributive effect of income tax was much weaker. The re-ranking effect was the factor which lowered the overall net tax redistributive effect.

Suggested Citation

  • Ewa Aksman, 2015. "To What Extent Do Social Benefits and Income Tax Alter Income Distribution in Poland?," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 41.
    • Handle: RePEc:eko:ekoeko:41_7
    DOI: 10.17451/eko/41/2015/84
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    File URL: http://ekonomia.wne.uw.edu.pl/ekonomia/getFile/759
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    References listed on IDEAS

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    1. Creedy, John, 1997. "Evaluating Alternative Tax and Transfer Schemes with Endogenous Earnings," Oxford Economic Papers, Oxford University Press, vol. 49(1), pages 43-56, January.
    2. Atkinson,Anthony Barnes & Micklewright,John, 1992. "Economic Transformation in Eastern Europe and the Distribution of Income," Cambridge Books, Cambridge University Press, number 9780521438827, September.
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