<abstract xmlns="http://www.w3.org/1999/xhtml"><p> Social disparities have a common and consistent character in the vast majority of contemporary countries. The level of income inequality in OECD countries has grown in the past 30 years and is still rising. Taxes and tax systems, aside from social transfers, are fiscal instruments widely used in compensation policy.</p><p>The aim of the article is to define the optimal structure of tax systems (i.e. the share of different tax categories in tax revenues) in terms of narrowing income disparities. To achieve this aim, scatter diagrams have been used. For the purpose of the article a tentative hypothesis has been formulated that the optimal tax system in terms of narrowing income disparities is characterised by a relatively large share of Personal Income Tax and at the same time a relatively low share of consumption taxes in tax revenues. The detailed analysis is focused on the countries for which the full data is available. The group of countries covers some “old” member states of the European Union (Austria, Belgium, Finland, Greece, Ireland, Italy, Luxembourg and the United Kingdom), the South- -East European countries (the Czech Republic, Estonia, Poland, the Slovak Republic and Slovenia) as well as non-EU countries (Canada and Iceland). These countries represent different levels of socio-economic development and, as a result, the variety of situations concerning the distribution of income.</p></abstract>

Social disparities have a common and consistent character in the vast majority of contemporary countries. The level of income inequality in OECD countries has grown in the past 30 years and is still rising. Taxes and tax systems, aside from social transfers, are fiscal instruments widely used in compensation policy.The aim of the article is to define the optimal structure of tax systems (i.e. the share of different tax categories in tax revenues) in terms of narrowing income disparities. To achieve this aim, scatter diagrams have been used. For the purpose of the article a tentative hypothesis has been formulated that the optimal tax system in terms of narrowing income disparities is characterised by a relatively large share of Personal Income Tax and at the same time a relatively low share of consumption taxes in tax revenues. The detailed analysis is focused on the countries for which the full data is available. The group of countries covers some “old” member states of the European Union (Austria, Belgium, Finland, Greece, Ireland, Italy, Luxembourg and the United Kingdom), the South- -East European countries (the Czech Republic, Estonia, Poland, the Slovak Republic and Slovenia) as well as non-EU countries (Canada and Iceland). These countries represent different levels of socio-economic development and, as a result, the variety of situations concerning the distribution of income.

The Impact of The Tax System Structure on The Narrowing of Income Disparities in OECD Countries

malgorzata.mazurek-chwiejczak@poczta.umcs.lublin.pl

Maria Curie-Skłodowska University (UMCS) in Lublin,

Financial Internet Quarterly

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Social disparities have a common and consistent character in the vast majority of contemporary countries. The level of income inequality in OECD countries has...

The Impact of The Tax System Structure on The Narrowing of Income Disparities in OECD Countries

Published Online: Feb 09, 2017

Page range: 27 - 37

Received: Aug 01, 2015

Accepted: Oct 31, 2015

DOI: https://doi.org/10.1515/fiqf-2016-0146

Keywords
redistribution, progression, tax policy

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

The Impact of The Tax System Structure on The Narrowing of Income Disparities in OECD Countries

Published Online: Feb 09, 2017

Page range: 27 - 37

Received: Aug 01, 2015

Accepted: Oct 31, 2015

DOI: https://doi.org/10.1515/fiqf-2016-0146

Keywordsredistribution, progression, tax policy

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
redistribution, progression, tax policy