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The distributional effects of personal income tax expenditure

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  • Avram, Silvia

Abstract

Using EUROMOD, this study investigates the size and distributional effects of tax allowances and tax credits in 6 European countries. It also examines whether instrument design matters in shaping the redistributive effect, paying attention to both categorical and explicit income targeting .With few exceptions the impact of tax allowances and tax credits on inequality is small. Tax credits are generally more progressive than tax allowances. The design of the allowances/credits appears to be less important than the characteristics of the population they are targeting and/or other features of the income tax system in determining the redistributive effect. Consequently, tax concessions appear ill-suited to target resources towards households in the bottom part of the income distribution.

Suggested Citation

  • Avram, Silvia, 2014. "The distributional effects of personal income tax expenditure," ISER Working Paper Series 2014-26, Institute for Social and Economic Research.
    • Handle: RePEc:ese:iserwp:2014-26
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    File URL: https://www.iser.essex.ac.uk/wp-content/uploads/files/working-papers/iser/2014-26.pdf
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    Cited by:

    1. Nathalie Morel & Chloé Touzet & Michaël Zemmour, 2016. "Fiscal welfare in Europe: a state of the art," Working Papers hal-02187913, HAL.
    2. Andrea Albarea & Michele Bernasconi & Cinzia Di Novi & Anna Marenzi & Dino Rizzi & Francesca Zantomio, 2015. "Accounting for Tax Evasion Profiles and Tax Expenditures in Microsimulation Modelling. The BETAMOD Model for Personal Income Taxes in Italy," International Journal of Microsimulation, International Microsimulation Association, vol. 8(3), pages 99-136.
    3. Salvador Barrios & Flavia Coda Moscarola & Francesco Figari & Luca Gandullia, 2020. "Size and distributional pattern of pension-related tax expenditures in European countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(5), pages 1287-1320, October.
    4. repec:hal:spmain:info:hdl:2441/6tnf35nani90ravvbmcpt0tod1 is not listed on IDEAS
    5. repec:spo:wpmain:info:hdl:2441/6tnf35nani90ravvbmcpt0tod1 is not listed on IDEAS

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