Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/68973
Authors: 
Verbist, Gerlinde
Year of Publication: 
2005
Series/Report no.: 
EUROMOD Working Paper Series EM2/05
Abstract: 
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.
Subjects: 
income redistribution
social benefits
income taxes
social insurance contributions
microsimulation
European Union
JEL: 
C81
D31
H23
H24
H55
Document Type: 
Working Paper

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