Suchergebnisse

In this paper we analyse how income taxation interferes with the logic and aims of the social security system. We investigate the distributional effects of the tax treatment of social benefits, and more specifically of old age pensions and unemployment benefits. We present a brief overview of the different ways of levying taxes on replacement incomes. We measure the distributional effects of these different tax treatments by comparing gross and net replacement incomes over income deciles. By calculating Gini and Kakwani indices, we also estimate the inequality reduction and the progressivity characteristics of taxes on replacement incomes. Having summarised the link between taxes and replacement incomes, as well as their distributional effects, we then try to distinguish if there is a link between the tax treatment of replacement incomes and the type of welfare state.

This paper gives an international comparison of the redistributive effect of personal income taxes in the 15 countries of the EU, using the European tax-benefit model EUROMOD. We focus on the effect of personal income taxes, social insurance contributions and other direct taxes. We present the contribution of progressivity and average tax rate to the reduction of income inequality, as well as the weight of the various types of tax concessions (i.e. exemptions, deductions, allowances and credits). There appears to be a wide variety among countries in the level of inequality reduction as well as in the instruments used to achieve this reduction. Personal income taxes are in all countries the most important source for inequality reduction, which is to a large extent, though not solely, due to the progressive rate schedule. Countries with a high degree of pre-tax inequality do not systematically redistribute more through their taxes; the results indicate rather the opposite.

This article studies the impact of design characteristics of in-work benefits on labour supply and poverty in an international comparative setting, taking account of both first-order (without taking labour supply effects into account) and second-order effects (taking labour supply effects into account). We use the microsimulation model EUROMOD, which has been enriched with a structural discrete choice labour supply model to take account of labour supply reactions. The analysis is performed for four EU member states: Belgium, Italy, Poland and Sweden. The results show that design characteristics matter substantially, though the specific effects differ in magnitude across countries, indicating there is no one-size-fits-all solution. Throughout the analysis, numerous trade-offs are uncovered: not only between work incentives and poverty goals, but also within work incentives themselves. Taking account of behavioural reactions attenuates the impact on poverty outcomes, signalling the importance of bringing these effects into the empirical analysis.

Over the last few years concern for income inequality in European countries has increased remarkably. In this context, taxation is an important redistributive instrument and we investigate the redistributive role of direct taxes. We focus on the EU-15 countries and the evolution over the period 1998-2008, using EUROMOD, the EU-wide tax-benefit model. The research aim of this paper is twofold. First, we investigate empirically whether there is a link between pre-tax income inequality and redistribution through taxes. Second we hereby test whether there is a relationship between progressivity and the average tax level, the two building stones of the redistributive impact of taxes.

To what extent can a country's effectiveness in reducing child poverty be attributed to the size of family cash transfers (i.e. both benefits and tax advantages) or to their design? In this paper, we disentangle the importance of each of these two factors, focusing on the family support system in Lithuania and comparing it with four other new member states. Both single and large families have increased susceptibility to poverty in Lithuania. This contrasts with other former communist countries, namely Estonia, Hungary, Slovenia and the Czech Republic which protect these family types much better. This paper examines whether their family transfer systems would achieve similar results in Lithuania. We employ the EUROMOD microsimulation tax-benefit model to swap family policies across countries and to test whether size or design has greater effects on child poverty reduction in Lithuania. Our results point to considerably improving poverty situation among large families under Hungarian, Slovenian and the Czech policies. Single parent families would only gain if Lithuanian spending on family transfers would increase by a large degree. Estonian policies would lead to very mixed results: small gains for large families and losses for single parent families.

Some people consider migration as a threat to our welfare state, whereas others see migration as the solution for the financial sustainability of the system of social security. Given the developments concerning migration, as well as the evolution of the welfare state, it seems us necessary to analyse the relationship between both. We discuss the impact of immigration on the government budget in seven Western countries by comparing recent empirical research. The studies distinguish between a static or dynamic approach. Both methodologies have restrictions, of which we analyze the implications for the results. On the basis of the fiscal consequences of immigrants for the different countries, we examine which factors drive the fiscal effects of immigrants. Finally, we examine which information is necessary to carry out an intergenerational analysis for Belgium.

In recent years simulation models are increasingly used in research on socio-economic policy, particularly in studies of taxes and social benefits. In this article we present two types of simulation models: the standard simulation model and the micro simulation model. Both models are micro models, meaning that they assess the structure and impact of social and economic policy measures for an individual decision unit (individuals, households and enterprises). We discuss the particularities of both models, point out that they are fully complementary and illustrate them with analyses of Belgian taxation and social contributions.

Western countries' income tax system exempts the return from investing in owner-occupied housing. Returns from other investments are instead taxed, thus distorting households' portfolio choices, although it is argued that housing property taxation might act as a counterbalance. Based on data drawn from the Statistics of Income and Living Conditions and the UK Family Resources Survey, and building on the tax benefit model EUROMOD, we provide novel evidence on the interplay of income and property taxation in budgetary, efficiency and equity terms in eight European countries. Results reveal that, even accounting for recurrent housing property taxation, a sizeable 'homeownership bias' i.e. a lighter average and marginal taxation for homeownership investment, is embedded in current tax systems, and displays heterogeneous distributional profiles across different countries. Housing property taxation represents only a partial correction towards neutrality.

We analyse intergenerational solidarity within multigenerational households (MGHs) and assess how the formation of these households is related to poverty across European countries. Our aim is to assess how this type of household is a coping strategy with respect to financial distress for families with children. Using data from EU Statistics on Income and Living Conditions (EU-SILC), we examine three specific empirical questions with regards to this complex form of intergenerational solidarity, notably (i) we identify to what extent co-residence within MGHs is financially beneficial to the young and/or the old generation; (ii) we analyse how the income brought into these households by the old generation impacts on child poverty, and (iii) we test how sensitive this impact is to hypotheses about the way resources are shared in the household. We define MGHs as those households where three generations cohabit. The results indicate that the formation of MGH operates mainly as solidarity from older to younger generations. Although not designed for this purpose, pensions alleviate child poverty in countries where MGH is most prevalent.

Abstract
Redistribution is usually understood in terms of income, as a resource used to rank individuals as well as determine tax liabilities or benefit entitlements. Yet, it is increasingly argued that more prominence should be given to the joint distribution of income and wealth and interest into the taxation of wealth for redistributive purposes has largely increased. By including income and wealth data from the Eurosystem Household Finance and Consumption Survey into the tax–benefit microsimulation model EUROMOD, we add two novel aspects to the literature. First, we include the analysis of taxes on wealth and wealth transfers. Second, we evaluate redistributive effects of tax–benefit systems against the joint income–wealth distribution instead of income only. We show that expressing living standards in terms of both income and wealth results in considerable reranking of individuals, which in turn leads to a lower redistributive impact of tax–benefit systems than is traditionally considered.

This paper asks what governments in the EU Member States and some US states are doing to support workers on low wages. Using model family simulations, we assess the policy measures currently in place to guarantee an adequate disposable income to working families, taking into account minimum wages, social security contributions, taxes and cash benefits. We show that despite increased efforts over the past decade, disposable incomes of certain types of minimum wage workers still fall well below the EU at-risk-of-poverty thresholds in many countries. Single earners with dependent children are especially at risk of poverty. We discuss the options for making progress.