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Abstract
This study analyzes redistribution within the Austrian
tax-benefit system. We take a comprehensive view and include not
only direct taxation and cash benefits but also indirect taxes
and in-kind transfers. We look at two kinds of redistribution:
between households belonging to different income groups, and
between generations, taking a life-cycle perspective.
We find that the inequality-enhancing effect of indirect taxes
is more than offset by the inequality-reducing effect of in-kind
benefits. The Gini coefficient increases from 0.24 to 0.26 due
to indirect taxes, but when adding in-kind benefits, it is
reduced to 0.23. The overall effect of both indirect taxes and
in-kind benefits is therefore progressive. When looking at the
impact of indirect taxes and in-kind benefits by generations, we
find substantial redistribution in the current system. Our
analysis highlights the importance of considering both indirect
taxation and in-kind benefits, in a comprehensive analysis of
the welfare state. Since in-kind benefits and indirect taxes can
vary substantially across countries, both might have a
substantial impact on cross-country comparisons of the
redistributional impact of welfare states.
More Information: https://www.oeaw.ac.at/fileadmin/subsites/Institute/VID/PDF/Colloquium/2020/Online_Colloquium_Announcement_Christl.pdf