IDEAS home Printed from https://ideas.repec.org/a/hpe/journl/y2019v228i1p83-108.html
   My bibliography  Save this article

Implementing a Negative Income Tax. Net Cost, Poverty and Inequality Effects

Author

Listed:
  • Rafael Granell Pérez

    (Universidad de Valencia)

  • Amadeo Fuenmayor Fernández

    (Universidad de Valencia)

Abstract

The main aim of this paper is to propose a financially viable alternative to the current Spanish system of social protection: A Negative Income Tax (NIT) unifying in a single mechanism the system of pub¬lic benefits and income tax. We analyse the main characteristics of the NIT and simulate several NIT proposals for Spain, using the Living Conditions Survey. These proposals are distinct in that they do not suppose an additional cost in the tax-benefit system. The results of our simulations indicate a radi¬cal improvement in the indicators of poverty and inequality, especially extreme poverty, and also a redistribution of income from the elderly to families with children

Suggested Citation

  • Rafael Granell Pérez & Amadeo Fuenmayor Fernández, 2019. "Implementing a Negative Income Tax. Net Cost, Poverty and Inequality Effects," Hacienda Pública Española / Review of Public Economics, IEF, vol. 228(1), pages 83-108, March.
    • Handle: RePEc:hpe:journl:y:2019:v:228:i:1:p:83-108
    as

    Download full text from publisher

    File URL: https://www.ief.es/docs/destacados/publicaciones/revistas/hpe/228_Art4.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jonathan H. Hamilton, 2010. "2009 Presidential Address - Optimal Tax Theory: The Journey from the Negative Income Tax to the Earned Income Tax Credit," Southern Economic Journal, John Wiley & Sons, vol. 76(4), pages 861-877, April.
    2. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    3. Maximilian Sommer, 2016. "A Feasible Basic Income Scheme for Germany," Contributions to Economics, Springer, edition 1, number 978-3-319-24064-0.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shijiang Chen & Mingyue Liang & Wen Yang, 2022. "Does Digital Financial Inclusion Reduce China’s Rural Household Vulnerability to Poverty: An Empirical Analysis From the Perspective of Household Entrepreneurship," SAGE Open, , vol. 12(2), pages 21582440221, June.
    2. Khanna, Neha, 2000. "Measuring environmental quality: an index of pollution," Ecological Economics, Elsevier, vol. 35(2), pages 191-202, November.
    3. Do, Manh Hung & Nguyen, Trung Thanh & Grote, Ulrike, 2023. "Land consolidation, rice production, and agricultural transformation: Evidence from household panel data for Vietnam," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 157-173.
    4. Clarke, Philip & Erreygers, Guido, 2020. "Defining and measuring health poverty," Social Science & Medicine, Elsevier, vol. 244(C).
    5. Davidson, Russell & Flachaire, Emmanuel, 2007. "Asymptotic and bootstrap inference for inequality and poverty measures," Journal of Econometrics, Elsevier, vol. 141(1), pages 141-166, November.
    6. Chakravarty, Satya R. & Deutsch, Joseph & Silber, Jacques, 2008. "On the Watts Multidimensional Poverty Index and its Decomposition," World Development, Elsevier, vol. 36(6), pages 1067-1077, June.
    7. Xuming He & Heng Xi & Xianbo Li, 2024. "Multi-Dimensional Decomposition, Measurement, and Governance Mechanism of Relative Poverty in Chinese Households under the Goal of Common Prosperity: Empirical Analysis Based on CFPS2020 Data," Sustainability, MDPI, vol. 16(12), pages 1-25, June.
    8. Hongliang Wang & Yiwen Yu, 2016. "Increasing health inequality in China: An empirical study with ordinal data," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(1), pages 41-61, March.
    9. Alejandro Lopez-Feldman, 2013. "Climate change, agriculture, and poverty: A household level analysis for rural Mexico," Economics Bulletin, AccessEcon, vol. 33(2), pages 1126-1139.
    10. Alonso-Villar, Olga & del Río, Coral, 2010. "Local versus overall segregation measures," Mathematical Social Sciences, Elsevier, vol. 60(1), pages 30-38, July.
    11. Augustin Kwasi Fosu, 2009. "Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 45(5), pages 726-745.
    12. Oihana Aristondo & Casilda Lasso De La Vega & Ana Urrutia, 2010. "A New Multiplicative Decomposition For The Foster–Greer–Thorbecke Poverty Indices," Bulletin of Economic Research, Wiley Blackwell, vol. 62(3), pages 259-267, July.
    13. Tomáš Želinský & Martina Mysíková & Thesia I. Garner, 2022. "Trends in Subjective Income Poverty Rates in the European Union," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(5), pages 2493-2516, October.
    14. Khan, Haider A., 1999. "Sectoral Growth and Poverty Alleviation: A Multiplier Decomposition Technique Applied to South Africa," World Development, Elsevier, vol. 27(3), pages 521-530, March.
    15. Tomoki Fujii, 2013. "Geographic decomposition of inequality in health and wealth: evidence from Cambodia," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(3), pages 373-392, September.
    16. Eirini Andriopoulou & Eleni Kanavitsa & Panos Tsakloglou, 2019. "Decomposing Poverty in Hard Times: Greece 2007-2016," Revue d’économie du développement, De Boeck Université, vol. 27(2), pages 125-168.
    17. Bruno, Michael & Ravallion, Martin & Squire, Lyn, 1996. "Equity and growth in developing countries : old and new perspectives on the policy issues," Policy Research Working Paper Series 1563, The World Bank.
    18. Bjorn A Gustafsson & Deng Quheng, 2011. "Di Bao Receipt and Its Importance for Combating Poverty in Urban China," Poverty & Public Policy, John Wiley & Sons, vol. 3(1), pages 1-32, March.
    19. Nicholas Moellman, 2020. "Healthcare and Hunger: Effects of the ACA Medicaid Expansions on Food Insecurity in America," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(2), pages 168-186, June.
    20. Juan Luis Londoño & Miguel Székely, 2000. "Persistent Poverty and Excess Inequality: Latin America, 1970-1995," Journal of Applied Economics, Universidad del CEMA, vol. 3, pages 93-134, May.

    More about this item

    Keywords

    Basic Income; Negative Income Tax; Poverty; Inequality; Microsimulation.;
    All these keywords.

    JEL classification:

    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hpe:journl:y:2019:v:228:i:1:p:83-108. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Miguel Gómez de Antonio (email available below). General contact details of provider: https://edirc.repec.org/data/iefgves.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.