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Evolution of fiscal systems: Convergence or divergence?

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  • Paloma Péligry
  • Xavier Ragot

    (Sciences Po - Sciences Po)

Abstract

We analyze the convergence or divergence of the diversity of fiscal systems after the financial crisis of 2007. Studying 29 countries, we first document the evolution of the taxation of households, firms, labour, consumption and capital. We identify three types of fiscal systems: liberal, intermediate and high-redistribution, which can be ranked in ascending order of tax rates, confirming known typologies in the diversity of capitalism literature. Only the tax rate on corporate profits shows signs of downward convergence over the period. The other tax rates show rather signs of divergence. Second, a divergence is observed among the liberal and high-redistribution group over the period. The European countries are converging towards the high-redistribution model, with the exception of Great Britain, which is moving towards the liberal model. Thus, the financial crisis seems to contribute not to the convergence, but to the divergence of fiscal systems.

Suggested Citation

  • Paloma Péligry & Xavier Ragot, 2023. "Evolution of fiscal systems: Convergence or divergence?," Post-Print hal-04384035, HAL.
    • Handle: RePEc:hal:journl:hal-04384035
    DOI: 10.1093/ser/mwad070
    Note: View the original document on HAL open archive server: https://hal.science/hal-04384035
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    References listed on IDEAS

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    More about this item

    Keywords

    tax systems globalization capital taxation JEL classification: H12 H6 P43; tax systems; globalization; capital taxation JEL classification: H12; H6; P43;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance

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