The effects of personal income tax changes are usually analysed by comparing the inequality of income distributions before and after the tax policy change on a fixed pre-tax income distribution. This constant population methodology aims at isolating the «pure» redistributive effect of the tax legislation. On the basis of OECD (1987), this paper proposes a methodology to disentangle the pure effect of tax changes from the influence of other non-tax factors when the pre-tax income distribution is not fixed. For the Italian case, it is shown that the additional redistributive outcome displayed by changes of tax laws between 1995 and 2000 is only ¼ of the total change of the redistributive impact in the same period and is outweighed by the effect of inflationary fiscal drag.
Liberati, P., Gastaldi, F., Rapallini, C. (2008). A decomposition of the personal income tax changes in Italy: 1995-2000. FINANZARCHIV, 64(1), 87-114 [10.1628/001522108X312087].
A decomposition of the personal income tax changes in Italy: 1995-2000
LIBERATI, PAOLO;
2008-01-01
Abstract
The effects of personal income tax changes are usually analysed by comparing the inequality of income distributions before and after the tax policy change on a fixed pre-tax income distribution. This constant population methodology aims at isolating the «pure» redistributive effect of the tax legislation. On the basis of OECD (1987), this paper proposes a methodology to disentangle the pure effect of tax changes from the influence of other non-tax factors when the pre-tax income distribution is not fixed. For the Italian case, it is shown that the additional redistributive outcome displayed by changes of tax laws between 1995 and 2000 is only ¼ of the total change of the redistributive impact in the same period and is outweighed by the effect of inflationary fiscal drag.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
