Inequality and Fiscal Policy
Back Matter

Back Matter

Author(s):
Benedict Clements, Ruud Mooij, Sanjeev Gupta, and Michael Keen
Published Date:
September 2015
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    Contributors

    Chadi Abdallah is an Economist in the Expenditure Policy Division of the IMF’s Fiscal Affairs Department. He joined the IMF in 2012. Prior to his current position, he was an Assistant Professor of Economics at Miami University. He has published several studies on fiscal and mac-roeconomic issues, including in peer-reviewed journals such as the Journal of Money, Credit and Banking and the American Economic Journal: Macroeconomics.

    João Pedro Azevedo is a Lead Economist at the World Bank. He currently works for the Poverty Global Practice in the Europe & Central Asia region, focusing on Central Asia and Turkey and leading the region’s Statistics Team. He also leads the Global Solutions Group on Welfare Measurement and Statistical Capacity for Results in the Poverty Global Practice. Before joining the Bank, he led the Monitoring and Evaluation Unit in the Secretary of Finance for the State of Rio de Janeiro and was a Research Fellow at the Institute of Applied Economic Research in the Brazilian Ministry of Planning. He is a former Chairman of the Latin American and Caribbean Network on Inequality and Poverty and holds a Ph.D. in economics.

    Francesca Bastagli is the Head of Social Protection at the Overseas Development Institute and a Senior Visiting Fellow at the Centre for Analysis of Social Exclusion at the London School of Economics and Political Science. She specializes in the analysis of social policy, poverty and inequality, employment, and gender. Her recent research examines trends in the distribution of wealth and the extension of social protection to informal sector workers. She holds a laurea in economics from Bocconi University and a Ph.D. in social policy from the London School of Economics and Political Science.

    Serhan Cevik is a Senior Economist in the IMF’s Fiscal Affairs Department. Prior to joining the IMF in 2009, he worked at Morgan Stanley and Nomura as Chief Emerging Markets Economist. He completed his graduate studies in economic history at the London School of Economics and Political Science and in economics at American University.

    Benedict Clements is the Chief of the Fiscal Policy and Surveillance Division in the IMF’s Fiscal Affairs Department. He has worked at the IMF since 1991. He was previously the Chief of the department’s Expenditure Policy Division as well as a Division Chief in the Western Hemisphere Department, where he led IMF teams working on Brazil and Colombia. He has published extensively on public finance and macroeconomic issues.

    David Coady is the Chief of the Expenditure Policy Division in the IMF’s Fiscal Affairs Department. Prior to that, he was Lead Social Spending Expert in the department, the Deputy Chief of its Expenditure Policy Division, a Research Fellow at the International Food Policy Research Institute, and a Lecturer in economics in the University of London. He earned his Ph.D. in economics from the London School of Economics and Political Science. His research interests include development and public economics, and he has worked extensively on policy issues related to the efficiency and distributional implications of public policies. He recently coedited The Economics of Public Health Care Reform in Advanced and Emerging Economies and Energy Subsidy Reform: Lessons and Implications. His research has been published in leading economic journals.

    Carolina Correa-Caro is a Research Analyst in the IMF’s Fiscal Affairs Department. She previously worked with governmental organizations in Colombia as a Research Assistant.

    Antonio C. David is an Economist in the IMF’s Institute for Capacity Development. Before joining the institute’s staff, he worked in the IMF’s African Department, and prior to that, he was an Economist at the World Bank and a Lecturer at the University of Essex. He received a Ph.D. in economics from the University of Cambridge and has published research on a wide range of topics in macroeconomics, including international capital flows, international integration and financial development, fiscal policy and inequality, and postconflict economic recovery.

    Ruud de Mooij is the Deputy Chief in the Tax Policy Division of the IMF’s Fiscal Affairs Department. Before joining the IMF in 2010, he was Professor of Public Economics at Erasmus University Rotterdam. He has published extensively on taxation issues, including in the American Economic Review and the Journal of Public Economics. His recent work deals with taxation and inequality, international tax spillovers, and corporate debt bias. He is also a Research Fellow at the Universities of Oxford, Bergen, and Mannheim and a member of the CESifo (Ifo Institute for Economic Research, Center for Economic Studies) network. He serves on the boards of the International Institute of Public Finance and the National Tax Association.

    Luc Eyraud is a Senior Economist in the IMF’s Western Hemisphere Department. He previously worked in the IMF’s Fiscal Affairs Department and at the French Treasury.

    Stefania Fabrizio is the Deputy Chief of the Low-Income Countries Strategy Unit in the IMF’s Strategy, Policy, and Review Department. Previously she has worked in the IMF’s Fiscal Affairs Department, European Department, and African Department. Her research interests include public expenditure, fiscal institutions, macroeconomic risks and vulnerabilities, external competitiveness, unemployment, and inequality. Prior to joining the IMF, she was a Visiting Professor at the University of Salamanca.

    Csaba Feher is a Technical Assistance Advisor in the IMF’s Fiscal Affairs Department. Prior to joining the IMF, he worked at the World Bank as a Senior Economist and Senior Financial Sector Specialist, covering public and private pension issues, including multipillar reforms, private pension scheme regulations, supervision and guarantees, disability insurance, and other social insurance expenditures. Between his earlier and current assignments in the United States, he worked as a Lead Analyst at the National Bank of Hungary, where he was involved in fiscal forecasting and long-term pension modeling and was also responsible for the country’s first sustainability report. As a Lead Economist at the Fiscal Council of Hungary, he was in charge of the Social Expenditures Unit. His private sector experience includes being the first Managing Director of the Private Pensions Guarantee Fund (Hungary) and working as an Investment Officer at the International Finance Corporation.

    Valentina Flamini is an Economist in the Expenditure Policy Division of the IMF’s Fiscal Affairs Department. She has worked at the IMF since 2009, previously in the European Department. She holds a doctoral degree in economics and finance. Prior to joining the IMF, she worked as an Economist in the Treasury Department of Italy’s Ministry of Economy and Finance.

    Maura Francese is a Technical Assistance Advisor in the IMF’s Fiscal Affairs Department. Prior to that she worked as a Senior Economist in the Fiscal Policy Division of Banca d’Italia, as a Research Fellow at the University of Ancona, and as a Lecturer at the University of York. She holds a doctorate in economics from the University of Ancona and a master’s from the University of York. Her work to date and publications cover a wide range of public economics and fiscal policies issues related in particular to the area of public spending and debt.

    Davide Furceri is an Economist in the IMF’s Research Department. He holds a Ph.D. in economics from the University of Illinois and a doctoral degree in regional economics from the University of Palermo. He previously worked as an Economist in the Fiscal Policy Division of the European Central Bank, in the Macroeconomic Analysis Division of the Organisation for Economic Co-operation and Development, and in the IMF’s Middle East and Central Asia Department. He has published extensively in international journals in the areas of macroeconomics, public finance, and international macroeconomics.

    Vitor Gaspar, a Portuguese national, is the Director of the IMF’s Fiscal Affairs Department. Prior to joining the IMF, he held a variety of senior policy positions at Banco de Portugal, including, most recently, Special Adviser. He served as Portugal’s Minister of State and Finance during 2011–13. He was head of the European Commission’s Bureau of European Policy Advisers during 2007–10 and Director-General of Research at the European Central Bank from 1998 to 2004. He holds a Ph.D. and a postdoctoral agregado in economics from Universidade Nova de Lisboa; he also studied at Universidade Católica Portuguesa.

    Sanjeev Gupta is a Deputy Director in the IMF’s Fiscal Affairs Department. He has also worked in the IMF’s African Department and European Department. He has authored or coauthored more than 150 papers on macroeconomic and fiscal issues and authored, coauthored, or coedited eleven books; the most recent books, all published by the IMF, are The Economics of Public Health Care Reform in Advanced and Emerging Economies (2012), Energy Subsidy Reform: Lessons and Implications (2013), and Equitable and Sustainable Pensions: Challenges and Experiences (2014).

    Dalia Hakura is a Deputy Chief and Mission Chief for the Republic of Congo in the IMF’s African Department; she has worked at the IMF since 1995. She was previously a Deputy Chief in the IMF’s Institute for Capacity Development, where she worked on regional training strategies and led training courses for government officials. She has also worked for the IMF’s Executive Board, Middle East and Central Asia Department, and Research Department. She holds a doctorate from the University of Michigan, Ann Arbor. She has published extensively on various macroeconomic issues.

    Emine Hanedar is a Technical Assistance Advisor in the Expenditure Policy Division of the IMF’s Fiscal Affairs Department. Prior to that she worked as a Senior Economist in the Strategy and Economic Policy Department and the European Department of the Dutch Ministry of Finance. Her work to date covers a wide range of macro and fiscal policy issues, in particular in the areas of fiscal adjustment, public debt (sustainability), public spending, tax policy, inequality, and the European Monetary Union. She has contributed to several (research) publications of the Dutch Ministry of Finance.

    Caroline-Antonia Hummel is a Researcher at the Finanzwissenschaftliches Forschungsinstitut (FiFo) Institute for Public Economics. Her research focuses on fiscal federalism, local public finance, and fiscal sustainability. She has worked as a Policy Consultant for numerous governments from the local to the federal level in Germany. She holds master’s degrees from the London School of Economics and Political Science and Sciences Po and is currently pursuing her Ph.D. at the University of Cologne.

    Ravi Kanbur is T. H. Lee Professor of World Affairs, International Professor of Applied Economics and Management, and Professor of Economics at Cornell University. He is ranked in the top 0.5% of academic economists in the world. He is President-Elect of the Human and Development Capabilities Association and a member of the Organisation for Economic Co-operation and Development’s High-Level Expert Group on the Measurement of Economic Performance. He has served on the senior staff of the World Bank, including as Chief Economist of the Africa Region and as Director of the Bank’s World Development Report.

    Michael Keen is a Deputy Director in the IMF’s Fiscal Affairs Department, where he was previously head of the Tax Policy and Tax Coordination Divisions. Before joining the IMF, he was Professor of Economics at the University of Essex and Visiting Professor at Kyoto University. He was awarded the Ifo Institute for Economic Research, Center for Economic Studies (CESifo)–International Institute of Public Finance (IIPF) Musgrave Prize in 2010, delivered the 2012 Chelliah lecture at the National Institute of Public Finance and Policy (NIPFP), and is Honorary President of the IIPF. He has led technical assistance missions to more than thirty countries on a wide range of issues in tax policy and consulted for the World Bank, European Commission, and private sector. He has served on the editorial boards of several leading journals and published extensively on tax policy and public finance issues.

    Tidiane Kinda is an Economist in the IMF’s Fiscal Affairs Department. He has contributed to the IMF’s multilateral surveillance analyses such as the Fiscal Monitor and the Vulnerability Exercise for Advanced Economies, as well as other cross-country work, including on fiscal rules and institutions and sovereign debt stabilization. At the IMF, he has worked on several countries, including Canada and Croatia, as well as the euro area. He holds a doctorate from the School of Economics of the University of Clermont-Ferrand. He has published numerous papers on public finance.

    Prakash Loungani is an Advisor in the IMF’s Research Department. He has worked at the IMF since 1998. He is also Adjunct Professor of Management at Vanderbilt University’s Owen Graduate School of Management. He has also worked in the Federal Reserve System (1992–98) and at the University of Florida (1986–90).

    Nora Lustig is Samuel Z. Stone Professor of Latin American Economics at Tulane University and the Director of the Commitment to Equity Institute, an initiative designed to analyze the impact of taxation and social spending on inequality and poverty in developing countries. She is also a Nonresident Fellow at the Center for Global Development and the Inter-American Dialogue. Her main research interests are the analytics of fiscal redistribution, applied fiscal incidence analysis, and the determinants of income distribution. She is a founding member and Past President of the Latin American and Caribbean Economic Association and codirected the World Bank’s World Development Report 2000–01, Attacking Poverty. She has a Ph.D. from the University of California, Berkeley.

    Thornton Matheson is a Senior Economist in the IMF’s Fiscal Affairs Department. An expert in taxation of financial services, she previously worked at the U.S. Department of the Treasury and holds degrees from the University of Maryland, the Johns Hopkins University, and Yale.

    Cameron McLoughlin is an Economist in the IMF’s African Department. Prior to joining the IMF, he worked as an Economist in the International Monetary Division of Banque de France. He holds a doctorate from the Graduate Institute of International Studies, Geneva.

    Carlos Mulas-Granados is a tenured Professor of Applied Economics at Madrid’s Complutense University. He is currently on secondment to the IMF’s Fiscal Affairs Department. Since he arrived at the IMF in late 2012, he has worked on fiscal adjustments, growth, inequality, and public investment. He holds a Ph.D. from the University of Cambridge and a master’s degree from Columbia University.

    John Norregaard is the Deputy Chief in the Tax Policy Division of the IMF’s Fiscal Affairs Department. He has worked at the IMF since 1992. Previously he worked at the Organisation for Economic Co-operation and Development (the Committee on Fiscal Affairs’ Working Party on Tax Policy and Tax Statistics) and in the Danish central administration, focusing on tax policy and intergovernmental public finance issues. He has published extensively on tax policy and fiscal decentralization issues.

    Ian Parry is a Principal Environmental Fiscal Policy Expert in the IMF’s Fiscal Affairs Department, where he leads environment, climate, and energy tax work. Prior to joining the IMF in 2010, he was at Resources for the Future for 15 years, where he was the first appointee to the Allen V. Kneese Chair in Environmental Economics. He holds a Ph.D. in economics from the University of Chicago. His research focuses on analytical models to quantify, for various countries, the economic impacts and efficient levels of a wide range of environmental, energy, and transportation policies. His work emphasizes the critical role of fiscal instruments in addressing externalities and raising revenue.

    Maximilien Queyranne is an Economist in the Expenditure Policy Division of the IMF’s Fiscal Affairs Department. Prior to joining the IMF, he worked as an Auditor in the French government and as a Public Sector Specialist at the World Bank. He is an alumnus of the French National School of Administration (ENA, École National d’Administration).

    Fabiano Rodrigues Bastos is an Economist in the Regional Studies Division of the IMF’s Western Hemisphere Department. Previously he worked in the IMF’s African Department. He has also worked at the Inter-American Development Bank, World Bank, and Bank of England. He has a Ph.D. from the University of Maryland.

    Roberto Schatan has been a Technical Assistance Advisor in the IMF’s Fiscal Affairs Department since 2011. He was previously with the Centre for Tax Policy and Administration at the Organisation for Economic Co-operation and Development and with Mexico’s Ministry of Finance, specializing in the taxation of multinational enterprises. He holds a doctorate in eco-nomics from the National University of Mexico.

    Louis Sears is a doctoral student at the University of California, Davis. His research interests are in the field of natural resource economics. He previously worked in the IMF’s Fiscal Affairs Department from 2012 to 2015.

    Mike Seiferling is a Lecturer in Public Finance at University College of London. He spent three and a half years working at the IMF and has since worked with several international organizations on public finance and statistical issues, including as a Visiting Scholar at the IMF. His research interests include public finance, fiscal transparency, quantitative methods, public sector accounting, and balance sheet analysis.

    Baoping Shang is an Economist in the Expenditure Policy Division of the IMF’s Fiscal Affairs Department. Prior to his current position, he worked at several leading research institutions, including RAND, the National Bureau of Economic Research, and the Urban Institute. His work to date has covered a wide range of fiscal policy issues, in particular in the area of expenditure policy, including health, pensions, employment, subsidies, and social assistance.

    João Tovar Jalles is an Economist in the IMF’s Fiscal Affairs Department. Previously, he was an Economist at the Organisation for Economic Co-operation and Development and before that a Fiscal Economist at the European Central Bank. He was also a Visiting Scholar in the IMF’s and Bank of Portugal’s Research Departments. He has been an Invited Lecturer at Sciences Po and an Assistant Professor at the University of Aberdeen, and he also taught at the University of Cambridge and Universidade Nova de Lisboa. He has worked mainly on fiscal policy and has published more than 35 papers in academic journals. He holds a B.Sc., M.Sc., and Ph.D., all in economics, from Universidade Nova de Lisboa, the University of Warwick, and the University of Cambridge, respectively.

    Index

    [Page numbers followed by b, f, n, or t refer to boxed text, figures, footnotes or tables, respectively.]

    A

    • Access to credit by poor households, 3

    • Active labor market program, 47–49

    • Advanced economies

      • carbon tax incidence, 237, 242–249, 243f, 244f, 245f, 247f, 248f

      • effectiveness of fiscal policy in reducing inequality, 42–43, 43f

      • fiscal policy choices available to, 4

      • household wealth trends, 122–123, 122t

      • housing price trends, 124f

      • inequality of opportunity in, 41–42

      • inequality trends, 38–39, 38f, 40, 322f

      • international corporate tax regimes, 182

      • international corporate tax spillover effects in developing countries, 178

      • lifetime income inequality trends, 40

      • pension spending, 273, 274f

      • policy tools for reducing inequality in, 8

      • property tax rates, 217t, 219t

      • property tax regimes, 194

      • property tax yields, 194–195, 195f, 196, 196f, 197f

      • recommendations for fiscal consolidation design, 171

      • recovery from global financial crisis, 159

      • redistributive effects of fiscal consolidation in, 161–169, 163f, 164f, 165b, 166f, 167f, 168f, 398

      • social spending reforms to reduce inequality in, 44–50, 54

      • stock price trends, 124f

      • tax reforms to reduce inequality in, 50–53, 54

      • wealth inequality in, 40–41, 40f, 126–127

      • wealth tax, 128–129, 129f

      • within-country inequality, 24, 25f

      • See also specific country

    • Africa

      • household income data sources, 78

      • income growth, 23

      • property tax regime, 192b

      • See also Sub-Saharan Africa; specific country

    • Alcohol taxation, 373, 378, 379t

    • Angola, 33

    • Armenia

      • energy subsidies, 264

      • social spending, 297, 306, 311

      • See also Commitment to Equity Project, health and education spending in

    • Asia and the Pacific

      • energy subsidies, 254, 255

      • growth trends, 79

      • impact of fuel price increases, 258

      • income growth, 23

      • inequality trends, 58, 79, 322, 322f

      • pension systems, 62

      • poverty trends, 79

      • property tax regime, 192b

      • public perception of inequality, 57

      • share of global wealth, 124–125

      • tax ratios, 66

    • Asian financial crisis (1997), 89

    • Australia, 197

    B

    • Base Erosion and Profit Shifting initiative, 178

    • Belgium, 52

    • Bilateral tax treaties, 178, 183–187, 184f, 189

    • Bolivia

      • social spending, 297, 306, 308

      • See also Commitment to Equity Project, health and education spending in

    • Brazil

      • conditional cash transfer programs, 72

      • distributional outcomes of fiscal adjustment, 17, 397–398, 404–410, 405–406t, 408t

      • drivers of inequality reduction, 397

      • energy subsidies, 264

      • evolution of fiscal policymaking, 398–399, 402f

      • fiscal data sources, 400

      • fiscal policy cyclicality, 401

      • inequality measurement, 400

      • inequality measures correlated with fiscal balance, 401–403, 402f

      • inequality patterns and trends, 397, 401–403, 401f, 402f

      • modeling methodology for analyzing fiscal adjustment–inequality linkage in, 403–407, 410

      • social spending, 297, 308, 311

      • subnational fiscal policymaking, 397, 398–399

      • tax revenues, 399

      • tax system, 210, 399

      • See also BRIC+ countries; Commitment to Equity Project, health and education spending in

    • BRIC+ countries, 352, 360t, 363

    • Bulgaria, 196

    C

    • Cambodia, 209

    • Canada

      • carbon tax price impacts, 243

      • income inequality in, 40

      • property tax regime, 196

      • wealth inequality in, 40–41, 127

    • Capital income tax

      • corporate and personal, 51

      • design challenges, 51

      • international cooperation in collecting, 52

      • labor income tax and, 51

      • progressivity, 51

      • wealth tax and, 128

      • withholding, 51–52

    • Carbon taxation, 13

      • compensation for low-income households, 235

      • current implementation, 233

      • design, 250

      • distributional concerns, 233–234, 249–250

      • distributional effects, 234b, 235, 241

      • environmental co-benefits, 239

      • incidence in advanced countries, 237, 242–249, 243f, 244f, 245f, 247f, 248f

      • incidence in developing countries, 242f

      • measuring economic incidence of, 235–238

      • passback in lower supply prices, 239

      • price impacts, 237–238, 242–245

      • rationale, 233

      • revenue recycling and diversion, 239–241, 246–249

      • transfers to offset burden of, 249, 250

    • Cash transfers, 227–228

      • energy subsidies as, 13–14, 264

    • Central African Republic, 211

    • Child care, 47

    • Child mortality, 390, 391f

    • Chile

      • carbon tax price impacts, 243

      • social spending, 306, 311

      • tax system, 210

      • wealth distribution, 126

      • See also Commitment to Equity Project, health and education spending in

    • China

      • economic growth, 23–24, 351

      • fiscal decentralization, 357, 358, 358f, 364–365

      • fiscal policy, 16, 352, 357–358, 358f

      • See also BRIC+ countries; China’s income inequality

    • China’s income inequality, 58, 126, 352–353

      • drivers of, 16, 351, 357, 364

      • economic growth and, 351–352, 365

      • fiscal policy and, 352, 361–366, 362t, 363t

      • global inequality trends and, 354–355, 354f

      • government spending and, 362, 365

      • methodology for analyzing fiscal policy linkage with, 352, 359–362

      • patterns and trends, 351, 352, 353f, 355

      • recommendations for pro-growth fiscal policies to reduce, 352–353, 365–366

      • regional differences, 351, 353, 353f, 357

      • tax policy and, 352, 353, 363, 364, 365

    • Classification of Functions of Government, 323

    • Climate change, 233

    • Colombia

      • social spending, 297, 306, 311

      • See also Commitment to Equity Project, health and education spending in

    • Commitment to Equity Project, health and education spending in

      • fiscal incidence analysis, 301–302

      • inequality and, 299–301, 300f

      • measuring progressivity of, 294

      • participating countries, 293

      • patterns and trends, 294–299, 296f, 315

      • progressivity and pro-poorness of, 295, 304–311, 306f, 309–310t, 312–314t, 315–316

      • redistributive effects of, 295, 302–304, 303f, 305t, 315

      • strategies for improving, 316

      • valuation of benefits, 294

    • Computer-assisted mass appraisal of real estate, 214b

    • Conditional cash transfers, 72, 73, 85, 87–88, 264

    • Congo, Republic of

      • capital expenditures, 388, 389f, 394

      • challenges of reducing income inequality in, 17, 385

      • child mortality, 390, 391f

      • education spending, 389, 390f, 394

      • fiscal challenges for, 385, 392, 394

      • fuel subsidies, 387–388, 388f, 393

      • government revenue, 386–387, 386f, 387f

      • government spending, 386, 386f, 387–390, 388f, 389f, 390f

      • health spending, 390, 390f, 394

      • income inequality in, 386, 386f

      • poverty in, 385–386, 386f

      • safety net programs, 390, 391b, 394

      • strategies for equitable fiscal consolidation, 392–394, 395

      • tax rates, 387, 387t

      • tax reform strategies, 392–393

    • Consumption taxes

      • redistributive effectiveness in developing countries, 65

      • redistributive effectiveness of targeted transfers versus reductions in, 225–230

    • Corporate income tax

      • design of redistributive policies in developing economies, 68–69

      • impact on wages, 68

      • policy challenges for developing countries, 11–12

      • rate comparison among country income groups, 181f

      • reform of international rules for, 12

      • revenue share by country income group, 177, 178f

      • trends toward territorial systems, 181–182

      • See also International corporate tax

    • Corruption, 29

    • Croatia, 196

    • Czech Republic, 242

    D

    • Decentralization

      • of Brazil’s fiscal policymaking, 398–399

      • in China, 357, 358, 358f, 364–365

      • internal migration effects, 320

      • modeling inequality linkage, 328–329, 328t

      • national conditions required for effectiveness of, in lowering inequality, 15, 319, 334

      • redistributive effects of, 330–334, 330t, 331f, 332f, 333f

      • of revenue collection, 15, 315, 320, 326–327, 330, 330t, 333

      • size of national government and inequality reduction from, 15, 319, 321, 331–332, 331f, 332f

      • of spending, 15, 319, 323–326, 324f, 325f, 330, 330t, 331, 334

      • subnational fiscal policy as source of inequality

      • reduction in Brazil, 397–398, 409

      • theoretical linkage with inequality, 15, 320–321, 333–334

      • transfer dependency in, 320, 326–327, 327f, 332, 333, 333f, 334

      • See also Local government

    • Demographic and Health Surveys, 78

    • Denmark

      • carbon tax incidence, 242

      • carbon tax price impacts, 243

      • lifetime income distribution, 43

      • property tax regime, 203–204, 204t

      • wealth distribution, 126

    • Developing economies

      • bilateral tax treaties, 183–187, 189

      • carbon taxation in, 13

      • carbon tax incidence in, 242f

      • challenges to reducing inequality in, 65

      • corporate income tax revenue, 177, 178f

      • corporate tax regimes, 11–12

      • design of redistributive policies in, 8–9, 65

      • determinants of inequality in, 26

      • fiscal adjustment in, 11

      • fiscal policy choices available to, 4

      • fuel subsidies in, 254–255, 255t

      • impact of fuel price increases on households, 257–262, 258f, 259f, 260f, 268–270t

      • inequality trends, 7–8, 57, 58, 58t, 322f

      • pension spending, 273, 274f

      • property tax rates, 217t

      • property tax regimes, 194

      • rationale for property tax reform, 12

      • recommendations for fiscal consolidation design, 172

      • recovery from global financial crisis, 159

      • redistributive effects of fiscal consolidation in, 169–170, 170f, 398

      • redistributive effects of health and education spending, 14–15

      • redistributive fiscal policies and outcomes, 59–65, 72–73

      • significance of international corporate tax regime for, 177–178, 189

      • strategies for enhancing fiscal redistribution in, 65–72, 73–74

      • tax ratios in, 66, 67f

      • within-country inequality trends, 24–26, 26f

      • See also specific country

    • Direct taxes, 42, 54, 59, 65, 130, 164, 353, 357, 365, 398

    • Domestic conflict, 160

    • Dutch tax-benefit system

      • findings from efficiency-equity analysis of reforms in, 337–338, 343–349

      • flat tax reforms, 337–339, 343, 344–345, 344t, 349

      • methodology for analyzing equity-efficiency trade-offs in, 337, 340–343

      • optimal tax theory analysis of equity and efficiency in, 338–340

      • selective in-work tax credits, 337, 347–348, 347t, 349

      • taxation of couples, 343–344, 345–347, 346t, 349

    E

    • Earned income tax credit, U.S., 5, 340

    • Educational attainment, 356, 357

    • Education spending

      • assessing redistributive outcomes of, 14

      • benefit-incidence of, 62, 63f

      • decentralization trends, 325–326, 326f

      • in IMF-supported programs, 27–28

      • redistributive effects in advanced economies, 43

      • redistributive effects in developing economies, 62, 295

      • redistributive impact, 14–15

      • to reduce inequality in advanced economies, 44–45

      • to reduce inequality in developing economies, 71

      • in Republic of Congo, 389, 390f, 394

      • on tertiary education, 45, 308–311, 315–316

      • See also Commitment to Equity Project, health and education spending in

    • Efficiency–equity trade-offs, 3

      • in capital income taxation, 51

      • in developing countries, 8–9

      • in direct tax design, 69

      • fiscal policy design and, 57, 65

      • in flat taxation schemes, 16

      • in IMF approach, 34

      • in India’s fiscal policy, 369, 380

      • tax policy design, 15, 69, 337

      • in wealth taxation, 136

      • See also Dutch tax-benefit system; Equity

    • El Salvador

      • property tax regime, 196

      • social spending, 297, 299, 306, 308, 311

      • See also Commitment to Equity Project, health and education spending in

    • Emissions trading, 250

    • Energy/fuel subsidies

      • automatic pricing mechanisms, 264–265

      • as cash transfers, 13–14, 264

      • cost-benefit ratio, 262

      • distributional effects, 13, 64–65, 253, 260–262, 261f, 265, 271t

      • impact of fuel price increases without, 256–262, 258f, 259f, 260f, 268–270t

      • in India, 372

      • leakage of benefits across income groups, 13, 64–65, 169, 262

      • obstacles to reform, 263b

      • rationale, 254

      • reforms to improve, 33, 53, 170, 263–265, 263b

      • in Republic of Congo, 387–388, 393

      • trends in oil prices and, 254–255, 254f, 255t

    • Energy taxes

      • carbon tax price impacts, 237–238

      • effectiveness of reduced rates or exemptions, 53

      • fuel tax incidence, 236–237, 236f

      • incidence, 234b

      • in India, 372–373, 378, 379t

      • See also Energy/fuel subsidies

    • Environmental policy, 90, 239

    • Equity

      • fiscal consolidation and, 156

      • gender, 7, 34. See also Gender differences

      • horizontal and vertical, 14, 277–278t, 279t, 280

      • IMF considerations of, 4, 27, 34

      • luxury goods taxation and, 53

      • pension system, 14, 273, 277–290

      • tax system, 50, 66, 73

      • value added taxation and, 69, 223, 225

      • See also Efficiency–equity trade-offs

    • Estonia

      • carbon tax price impacts, 243, 246

      • fiscal policy response to global financial crisis, 163, 164, 165b, 166f, 167f, 168f

      • redistributive effects of fiscal policy, 33

    • Ethiopia

      • social spending, 297, 299, 306, 308, 311

      • See also Commitment to Equity Project, health and education spending in

    • Europe

      • distributional effects of fiscal consolidation in, 163–169, 163f, 164f, 165b, 166f, 167f, 168f

      • evolution of global economy and, 21–24

      • property tax regime, 192b

      • taxation of couples, 340

      • tax policy trends, 339

    • Excise taxes, 43, 62

    • Extended Structural Adjustment Facility, 27

    F

    • Factor share distribution, 9–10

      • evolution of concepts and research, 99–100

      • modeling methodology, 100–102, 105–106, 111–118

      • significance of, in income inequality, 10, 97–98, 98, 100–110, 103f, 104f, 104t

    • Family benefits, 47, 48f

    • Financial transaction taxes, 53, 132–133, 136

    • Finland, 41

    • Fiscal consolidation

      • avoiding inequality effects in, 142

      • distributional effects in advanced economies, 161–169, 163f, 164f, 165b, 166f, 167f, 168f

      • distributional effects in Brazil, 17, 397–398, 404–410, 405–406t, 408t

      • distributional effects of, 30–33, 31f, 32f, 33f, 34, 141–142, 356–357, 397–398

      • distributional outcomes considered in design of, 10–11, 31, 33

      • distributional outcomes in developing economies, 169–170, 170f

      • economic recession during, 170, 171f

      • effects on income inequality, 145–148, 146f, 155–156, 159, 162b

      • effects on output, 141

      • episodes of, for analysis of distributional effects, 142–143, 144t, 150–153, 153f

      • in India. See Fiscal consolidation in India

      • labor market outcomes, 161–162, 162f, 170, 170f, 171f

      • measurement of, 141, 142

      • methodology for analyzing distributional impacts of, 145, 172–173, 403–407

      • recent experience with, in advanced economies, 163–169

      • recommendations for policy design, 156, 170–172

      • strategies for equitable, in Republic of Congo, 392–394, 395

      • subnational policymaking in Brazil, inequality and, 397–398

      • tax based vs. expenditure-based, 10, 11, 31, 148–150, 149f, 162, 162b, 398

    • Fiscal consolidation in India

      • challenges for policymakers, 369, 383

      • distributional impact of reforms, 377–383, 379t, 380t, 381f

      • evolution of, 16–17, 370–371

      • fuel taxation reforms and, 372–373, 378, 379t

      • spending programs and reforms, 373–377

      • strategies for reducing inequality and facilitating growth, 16–17, 369–370, 383

      • tax policies and reforms, 371–373

    • Fiscal expansion, 154–155, 154f, 155f

    • Fiscal incidence analysis, 301–302

    • Fiscal policy

      • adverse effects on inequality, 37

      • Brazil’s policymaking structure, 398–399

      • challenges to analysis of redistributive effects of, 352

      • China’s, 352, 357–358, 358f, 361–366, 362t, 363t

      • cyclicality, 401

      • determinants of redistributive outcomes of, 59–62

      • as driver of income inequality, 355

      • effectiveness of, in reducing inequality in advanced economies, 8, 42–43, 43f

      • evolution in India, 370–371

      • mechanisms to achieve redistributive goals, 3

      • redistributive outcomes of, in developing countries, 62–65

      • to reduce income inequality, 30, 37, 54

      • to reduce inequality, 44, 54

      • to reduce wealth inequality, 121

      • responses to global financial crisis, 141

      • strategies for enhancing redistribution in developing countries, 65

      • See also Fiscal consolidation; Public spending; Tax policy

    • Flat tax, 16, 337–339, 344–345, 344t

    • Foreign direct investment

      • bilateral tax treaties and, 185, 186

      • economic growth and, 177

      • income inequality and, 356

      • international tax regime and, 177, 182–183, 183t

    • France

      • carbon tax incidence, 242

      • carbon tax price impacts, 243

      • income inequality in, 32, 40

      • inequality trends, 101–102, 102t

      • property tax regime, 196

      • tax policy, 52, 133

    G

    • Gabon, 264

    • Gender differences

      • discrimination and, 7

      • in evolution of poverty studies, 82–83

      • flat tax effects on labor participation, 345

      • in-work tax credit effects on labor participation, 348

      • labor market outcomes, 7, 33–34

      • measures of, 6–7

      • modeling couples’ taxation in Netherlands, 343–344, 345–347, 346t

      • optimal tax theory modeling, 339–340

      • pension system equity, 280–281

      • policy approaches to promote equality, 7

      • significance of, 6

      • social and cultural norms as source of, 7

    • Generational accounting, 6

      • for assessing distributional effects of pension system, 14

    • Georgia, 196

    • Germany

      • income inequality in, 40

      • inequality trends, 101–102, 102t

      • property tax regime, 194, 194t

    • Ghana, 264

    • Gift taxes, 10, 30, 52, 130–132, 136

    • Gini index

      • advanced economies 8,59,59f

      • Brazil’s, 397, 401–403

      • China’s, 351, 352, 353f, 354f, 355, 359, 359f, 360f, 362, 363, 364, 365

      • developing economies, 59, 59f 14–15, 58, 58t

      • disposable income, 32f, 38, 38f, 40, 47, 58t, 60, 126, 126f, 142, 145–148

      • economic mobility, 41, 41f

      • fiscal policy effects, 32, 33f, 42, 43, 43t, 59, 149–150, 149f, 153f, 154f, 155, 155f, 161, 162f, 163, 168, 168f, 170f, 171f, 323

      • India’s, 378, 380, 381

      • in-kind spending, 44f

      • labor share of income and, 97, 98–99, 100, 101, 103, 103f, 107

      • market income, 31f, 60, 61f, 103f, 104t, 303f, 304, 307

      • patterns and trends, 24, 25f, 321, 322f

      • public pension spending and, 274f

      • Republic of Congo’s, 386, 391b

      • social spending and, 294, 295, 299, 300f, 302, 303–304, 305f, 310f, 311, 313f

      • wealth distribution, 40, 40f, 41, 126, 126f, 127

      • See also Income inequality

    • Global economy

      • historical evolution, 21–23, 22f

      • household wealth trends, 123–124, 124f

      • impacts of globalization, 80–81

      • inequality linkage, 355–356

      • inequality patterns and trends, 21–24, 23f, 24f, 25f, 354–355, 354f

      • regional distribution of wealth, 124–125

      • tax collection, 52, 134

    • Global financial crisis

      • challenges for redistributive policy design in recovery from, 53–54

      • effects on poverty and inequality policies, 89

      • fiscal policy responses, 141, 156, 159

      • IMF focus on inequality issues since, 29–34

      • inequality outcomes in Europe of fiscal consolidation after, 163–169, 163f, 164f, 165b, 166f, 167f, 168f

      • recovery from, 159

      • salience of inequality issues and, 26, 27f

    • Governance

      • effectiveness of distributional policies and, 29

      • evolution of inequality research, 88–89

    • Greece

      • carbon tax price impacts, 243

      • fiscal policy response to global financial crisis, 163–164, 165b, 166f, 167f, 168, 168f, 169

      • property tax regime, 194, 194t

      • redistributive effects of fiscal policy, 32, 33

    • Growth

      • in Asia, 79

      • China’s, 351–352

      • China’s income inequality and, 16, 352, 365

      • compatibility of redistributive policies and, 8, 29–30, 34

      • foreign direct investment and, 177

      • income inequality and, 16, 21, 355, 356

      • inequality as obstacle to, 29–30, 80, 351–352

      • labor share of, 97–98, 98f

      • property taxation and, 200

      • wealth inequality and, 121

    • Guatemala

      • social spending, 299, 306, 308, 311

      • See also Commitment to Equity Project, health and education spending in

    H

    • Health spending

      • assessing redistributive outcomes of, 14

      • decentralization trends, 325–326, 326f

      • efficiency of, 46

      • in IMF-supported programs, 27–29, 28f

      • redistributive effects in advanced economies, 43

      • redistributive effects in developing economies, 62

      • redistributive impact, 14–15, 228–229, 228f

      • to reduce inequality in advanced economies, 45–46

      • to reduce inequality in developing economies, 71–72

      • in Republic of Congo, 390, 390f, 394

      • share of public spending, 45

      • trends, 28f

      • See also Commitment to Equity Project, health and education spending in

    • Heavily Indebted Poor Countries initiative, 27, 34

    • Highest income groups

      • beneficiaries of reduced commodity taxes, 224–225

      • distribution of energy subsidy benefits, 260–262, 261f

      • income distribution in China, 351

      • income distribution trends in advanced economies, 38–39, 39f

      • share of wealth held by, 40

    • Horizontal equity, 14, 277–278, 278t, 279t, 280

    • Household consumption

      • data sources, 238

      • impact of fuel price increases, 256–262, 258f, 259f, 260f, 268–270t

      • intrahousehold inequality, 82–83

    • Household income

      • challenges in assessing distributional effects of tax policy, 4–5

      • data sources, 78

      • determinants of inequality in, 10

      • energy spending, 13, 256–257, 268–270t

      • evolution of inequality and poverty concepts, 9–10, 82–84

      • as focus of inequality research, 5

      • intrahousehold inequality and, 82–83

      • life cycle analysis, 5–6

      • measuring gender disparities in, 6–7

      • property tax revenue and, 196, 197f

      • sources of, 10

      • trends in China, 351

      • See also Income inequality

    • Household wealth

      • composition, 41, 125, 125f

      • defined, 121

      • distribution, 135

      • drivers of accumulation in, 123

      • from inheritance, 131–132, 136

      • measurement, 121–122

      • trends, 40, 122–125, 122t, 124f

      • See also Wealth taxes

    • Housing costs, 124f, 201, 202, 205, 206f

    • Human Development Index, 83–84

    • Hungary, 32

    I

    • Iceland, 133

    • Import taxes, 62

    • Income inequality

      • data sources, 115–118, 142

      • decentralization outcomes, 330–334, 330t, 331f, 332f, 333f

      • defined, 37

      • demographic influences on, 356

      • determinants of, in developing countries, 24–26

      • dispersion of labor share of income as determinant of, 10, 98, 104f, 107, 109–110, 109t

      • economic development and, 16, 21, 355, 356

      • effectiveness of fiscal policy in reducing, in advanced economies, 42–43, 43f

      • effects of fiscal consolidation in advanced economies, 161–169, 163f, 164f, 165b, 166f, 167f, 168f

      • effects of fiscal consolidation in developing economies, 169–170, 170f

      • effects of tax-based versus spending-based fiscal consolidation, 148–150, 149f

      • fiscal consolidation and, 10–11, 141–142, 145–148, 146f, 155–156, 159, 162b, 170–172, 397–398, 404–410, 405–406t, 408t

      • fiscal expansion and, 154–155, 154f, 155f

      • fiscal policy linkage with, 356–357

      • foreign direct investment and, 356

      • globalization as driver of, 355–356

      • global trends, 21–24, 23f, 24f, 79–80

      • intergenerational income mobility and, 41

      • labor share of economic growth and, 97–98, 98f, 100–110, 104t, 109t

      • modeling fiscal consolidation effects on, 172–173, 403–407

      • regional differences, 58, 59f

      • social spending and, 299–301, 300f, 356

      • tax policy as instrument for reducing, 12, 356–357

      • trends in advanced economies, 38–39, 38f

      • trends in Brazil, 401–403, 401f, 402f

      • trends in developing economies, 57, 58, 58t

      • wealth inequality and, 40, 121, 126, 126f, 356

      • within-country trends, 24–26, 25f, 26f, 351

      • See also China’s income inequality; Redistributive policies

    • Income tax

      • assessing distributional effects of, 4

      • capital, 51–52

      • decentralized administration, 327, 327f

      • as instrument for reducing inequality in developing countries, 65

      • redistributive effects of, 60, 61f

      • See also Corporate income tax; Personal income tax

    • India

      • alcohol and tobacco consumption and taxation, 373, 374t

      • distributional outcomes of fiscal adjustment, 16–17

      • economic growth, 23–24

      • Employment Guarantee Scheme, 369

      • evolution of fiscal deficit, 370, 370f

      • fuel taxes, 372–373, 372t

      • health care spending, 228, 228f

      • household wealth composition, 125

      • labor market, 34

      • Mahatma Gandhi National Rural Employment Guarantee Act, 373, 375–377, 376t, 379–380, 380t, 383

      • Public Distribution System, 369, 373, 374–375, 379, 380t, 383

      • public spending trends, 371f

      • response to global financial crisis, 370

      • sin taxes, 373

      • subsidy spending, 371, 371f, 372

      • tax reforms, 378, 379t, 380–383

      • tax revenues, 371f

      • See also BRIC+ countries; Fiscal consolidation in India

    • Indirect taxes

      • in China, 357

      • design for reducing inequality in developing countries, 65, 69

      • efficiency–equity trade–offs, 69

      • redistributive effectiveness of targeted transfers versus reductions in, 225–230

      • redistributive effects in advanced economies, 8, 43, 53

      • redistributive effects in developing economies, 60–62

      • reduced rates for poor consumers, arguments for and against, 223–225

    • Indonesia

      • household wealth composition, 125

      • income inequality in, 58

      • social spending, 297, 308, 311

      • wealth distribution, 126

      • See also Commitment to Equity Project, health and education spending in

    • Inequality

      • in advanced economies, 42

      • assessment methodologies, 9, 21, 80–81

      • distributional impacts of energy subsidies, 265

      • distributional impacts of fuel price increases, 260–262

      • drivers of, 79

      • effects of health and education spending on, 295

      • evolution of concepts and measures of, 77, 81–86, 142

      • fiscal consolidation outcomes, 30–33, 31f, 32f, 33f

      • fiscal federalism and, 15

      • fiscal strategies for reducing, in advanced economies, 44–53

      • fiscal strategies for reducing, in developing economies, 65–73

      • forms of, 37–38

      • generational accounting of tax and spending policies, 6

      • global trends, 7–8, 21–24, 23f, 24f, 321–322, 322f

      • implications for growth, 21

      • intrahousehold, 82–83

      • legitimate, 86

      • level of analysis, 5

      • life cycle analysis, 5–6

      • as obstacle to growth, 29–30, 80

      • poverty and, 9, 80

      • public perception of, 37, 57

      • regional differences, 322–323, 322f

      • within-country trends, 7–8

      • work of IMF and, 4, 8, 21, 27–34

      • See also Income inequality; Wealth inequality

    • Inflation, 355, 357

    • Inheritance taxes, 10, 30, 52, 130–132, 131t, 136

    • In-kind transfers, 43, 44f, 169, 323

      • to expand health and education services, 62

      • shortcomings of, 70

      • valuation, 294

    • Interest rates, household wealth and, 123, 123f

    • International corporate tax

      • anti-avoidance measures, 178

      • bilateral tax treaties and, 183–187, 184f, 189

      • current practice, 179–180

      • dividend repatriation and, 182–183

      • effects of territoriality, 182–183

      • foreign direct investment decisions and, 177, 182–183, 183t, 186

      • income allocation rules for multinationals, 178, 179–180, 187–188, 188f

      • information exchange agreements, 185

      • spillover effects, 11, 178, 180–181, 188–189

      • trends toward territorial systems, 181–182

    • International Monetary Fund

      • fiscal policy recommendations, 156

      • inequality concerns in work of, 4, 8, 21, 27–34, 79

    • In-work benefits, 47–49, 49b, 340, 347–348, 347t, 349

    • Iran, Islamic Republic of, 227

    • Ireland, 32

    • Israel

      • carbon tax price impacts, 243

      • property tax regime, 196

    • Italy

      • fiscal policy response to global financial crisis, 163, 165b, 166f, 167f, 168f, 169

      • household wealth, 40

      • intergenerational income mobility, 41

      • pension system, 6

      • wealth inequality in, 40, 41

    J

    • Japan

      • bilateral tax treaties, 186

      • carbon tax price impacts, 243

      • household wealth, 123

      • labor market, 34

      • pension system, 6

      • property tax regime, 196

      • wealth distribution, 126

      • wealth inequality in, 40

    K

    • Kenya

      • energy subsidies, 264

      • tax system, 210

    • Korea

      • carbon tax incidence, 242

      • labor market, 34

    • Kuznets curve, 16, 79, 80, 322, 355, 362, 363

    • Kyrgyz Republic, 209

    L

    • Labor market

      • challenges for European governments, 337

      • decision margins in Netherlands, 337

      • family benefit programs and, 47

      • fiscal consolidation effects in, 161–162, 162f, 170, 170f, 171f

      • flat tax effects in, 345

      • frictional unemployment, 343

      • gender differences in participation, 7, 33–34

      • in-work tax credits, 340, 347t, 348, 349

      • methodology for analyzing equity-efficiency trade-offs in taxation, 340–343

      • optimal tax theory modeling, 15–16, 339–340

      • redistributive effects of economic development in, 356

      • reducing impact of public works programs on, 71

      • as source of distributional outcomes, 10, 33

      • as source of inequality reduction in Brazil, 397, 404–410, 405–406t

      • taxation of couples and, 345–347

      • union bargaining, 342–343

      • work disincentives in social assistance programs, 47–49, 50

      • See also Wages

    • Latin America and the Caribbean

      • energy subsidies, 255

      • impact of fuel price increases, 258

      • inequality trends, 58, 79, 322, 322f, 323

      • pension systems, 62

      • progressivity of social spending, 311

      • property tax regime, 192b

      • public perception of inequality, 57

      • redistributive effects of fiscal policy, 60

      • tax collection, 212

      • tax ratios, 66

      • tax systems, 219t

    • Latvia

      • fiscal policy response to global financial crisis, 163–164, 165b, 166f, 167f, 168f, 169

      • redistributive effects of fiscal policy, 32, 33

    • Lifetime income inequality, 5–6, 37–38

      • annual income inequality and, 39–40

      • distributional effects of transfers, 43

      • trends in advanced economies, 39–40

    • Lithuania, 163

      • fiscal policy response to global financial crisis, 164, 165b, 166f, 167f, 168f, 169

    • Living Standards Measurement Survey, 78

    • Local government

      • property tax administration, 210, 212

      • property tax revenues, 196–198, 200, 217–219t

      • tax revenue, 214–215

      • See also Decentralization

    • Low-income households

      • access to credit, 3

      • carbon tax incidence, 233–235

      • policies to improve health care access for, 45–46

      • reforms to improve education access for, 44–45

      • targeting energy subsidies to benefit, 263–265, 263b

      • transfers to offset burden of carbon tax, 249, 250

    • Luxembourg, 194, 194t, 196

    • Luxury good taxes, 53

    M

    • Maternal and paternal leave, 47

    • Mexico

      • carbon tax price impacts, 243

      • conditional cash transfer programs, 72

      • social spending, 308, 311

      • tax system, 224, 224f

      • See also Commitment to Equity Project, health and education spending in

    • Middle East and North Africa

      • energy subsidies, 254, 255

      • impact of fuel price increases, 258

      • inequality trends, 58

      • pension systems, 62

      • tax ratios, 66

    • MIMIC, 340–343

    • Minimum income programs, 47

    • Moldova, 196

    • Mongolia, 196

    • Mortgage interest deduction, 50–51

    • Motherhood, 7

    • Mozambique, 264

    • Multinational corporations, 11, 12, 30

      • arms-length valuation of intracompany transactions, 178, 179–180

      • current international corporate income tax framework, 179–180

      • determining residence of, 179

      • determining source of profits, 179

      • income allocation rules in international tax system, 178, 179–180, 187–188, 188f

      • taxation of, 52

      • tax-avoidance strategies, 180

      • tax policy effects on investment decisions of, 177

    N

    • Namibia, 209, 211

    • Netherlands

      • analysis of tax system equity and efficiency, 15

      • bilateral tax treaties, 185

      • See also Dutch tax-benefit system

    • New Zealand, 125, 194, 194t, 196

    • Nicaragua

      • conditional cash transfer programs, 85

      • poverty patterns, 81

    • Niger, 264

    • Nigeria, 264

    • Norway

      • carbon tax incidence, 242

      • carbon tax price impacts, 243

      • tax policy, 133

      • wealth distribution, 40, 126

    O

    • Opportunity, inequality of, 38, 41–42, 41f, 86

    • Optimal marginal tax schedule

      • determinants of, 15

      • distributional profile, 15

      • linear and non-linear structures, 338–339

      • modeling methodology, 15–16

      • shortcomings of, as design tool, 15

      • taxation of couples, 339–340

    P

    • Pension systems

      • actuarial fairness, 280–281, 280b

      • alignment with other policy designs, 274, 290

      • assessing distributional effects of, 14

      • benefit cuts, 47

      • concept of equity in, 277–279, 278t

      • coverage, by region, 276, 277f

      • defined-benefit schemes, 281, 282, 284

      • demographic trends and, 273

      • design challenges, 273–274

      • determinants of coverage, 279

      • distributional effects, 273, 274f, 276, 286–289

      • equity considerations in design of, 279–286, 289–290

      • fully funded defined-contribution schemes, 285

      • generational accounting of benefit distribution, 6, 278–279

      • horizontal and vertical equity, 14, 277–278, 278t, 279t, 280, 281f, 282, 285, 286, 289–290

      • indexation rules, 287

      • intergenerational equity, 277–279, 278f, 282, 284

      • noncontributory schemes, 285–286

      • notional defined contribution schemes, 284–285

      • paradigmatic reforms, 288–289

      • parametric reforms, 286–288

      • policy objectives, 273, 276–277

      • political economy of design, 290

      • rationale for life cycle analysis of distributional effects of, 6

      • redistributive impact of, in developing countries, 62, 70

      • reforms to decrease inequality in advanced economies, 46–47

      • reforms to decrease inequality in developing economies, 70

      • regulatory homogeneity, 280, 289

      • replacement rates, 47

      • retirement age, 287, 290

      • risk sharing, 281, 288

      • spending patterns and trends, 273, 274f, 275f

      • strategies for enhancing equity outcomes, 14

      • structural reforms, 288

      • structure of, 276, 276f

      • tax treatment of pension incomes, 46–47, 282–284, 283f

    • Personal income tax

      • in China, 357, 364

      • design of redistributive policies in advanced economies, 8, 50–51

      • design of redistributive policies in developing economies, 67–68

      • as instrument for redistribution, 30, 42

      • in Republic of Congo, 387, 387t, 392

      • thresholds, 51, 67

      • top rates, 50

    • Personal responsibility, 86

    • Peru

      • property tax regime, 196

      • social spending, 299, 306, 308, 311

      • See also Commitment to Equity Project, health and education spending in

    • Philippines, 264

    • Poland

      • carbon tax incidence, 242

      • property tax regime, 194, 194t

    • Population

      • global trends, 21–24, 22f

      • growth, income inequality and, 356

    • Portugal

      • fiscal policy response to global financial crisis, 163–164, 165b, 166f, 167f, 168f, 169

      • redistributive effects of fiscal policy, 32–33

    • Poverty

      • data sources, 78–79

      • evolution of concepts and measures of, 77, 81–86

      • global trends, 23, 23f, 79–80

      • IMF programs for reducing, 27–28

      • income distribution and, 9

      • inequality and, 80

      • intrahousehold differences, 82–83

      • multidisciplinary approach to research on, 84–86

      • public pension benefits and, 276

      • in Republic of Congo, 385–386

      • risk, 82

      • trends in China, 351

    • Poverty Reduction and Growth Facility, 27, 34

    • Price subsidies, 70, 73

    • Profit and rent incomes

      • distributional effects of fiscal consolidation designs on, 150

      • See also Corporate income tax

    • Progressivity

      • capital income tax, 51

      • carbon taxes, 245

      • China’s tax system, 357, 364, 365

      • defined, 377, 377b

      • fiscal consolidation, 1

      • of fiscal policy, inequality and, 319, 322–323, 326–327, 356–357, 383

      • indirect taxes, 8, 69

      • inheritance and gift taxes, 130

      • personal income tax, 8, 17, 50–51, 169

      • policy design in developing countries, 9

      • property tax, 209

      • Republic of Congo’s tax system, 387, 392, 393, 394

      • social spending, 15, 17, 44–45, 71, 294, 295, 304–311, 316, 353, 379

      • value added taxes, 53, 62, 69

      • wealth tax, 10, 127, 135–136

    • Property tax

      • administrative challenges, 212–213

      • administrative reform, 215

      • advantages of, as revenue source, 191, 198–202

      • on businesses, 200–201

      • composition, 194, 194t

      • computer-assisted mass appraisal, 214b

      • country income level and yield from, 196, 197f

      • coverage ratio, 210

      • current approaches to, 193–194

      • cyclical sensitivity and resilience, 204–206

      • defining and measuring tax base, 206–209, 208t

      • design options, 206–211

      • determinants of rates and revenue, 198, 199b, 206, 209

      • enforcement, 212

      • exemptions and incentives, 208–209

      • fairness concerns, 130, 202–204, 203b

      • growth and, 200

      • international comparison, 217–219t

      • per capita income levels and yield from, 196, 197f

      • political economy of, 191, 213–215

      • potential revenue from, 52–53, 198, 216

      • rate systems, 209

      • rate trends, 194, 195t

      • rationale for increasing revenue from, 10, 12, 30

      • recent reform trends, 191–192, 192b

      • to reduce wealth inequality, 129–130, 136

      • reform challenges, 12

      • reform strategies, 215–216, 393

      • revenue from, 130, 130t, 136, 193

      • scope of, 193

      • self-assessment, 212, 213b

      • as subnational revenue, 196–198, 200, 217–219t

      • in urban areas, 208

      • use considerations, 206–207

      • valuation, 206, 207b, 210–211, 212

      • yield, 194–198, 195f, 196f, 197f

    • Property transactions and transfers, 10, 53, 132–133, 132b, 136, 211

    • Psuedo-Gini index of labor income, 102, 103–105, 103f, 110, 111–113

    • Public debt, 141

    • Public opinion

      • perceived significance of inequality, 37, 57

      • of property tax systems, 213–215

      • resistance to property tax increase, 191

      • salience of inequality issues in, 26

      • support for redistributive policies, 26, 27f, 37, 57, 159–160, 161f

    • Public spending

      • avoiding poverty traps in

      • in Brazilian states, 397, 399

      • challenges in assessing distributional effects of, 5

      • in China, 16, 352, 353, 357–358, 358f, 362, 364, 365

      • composition, 45

      • consideration of tax policy in design of, 4

      • decentralization of, and inequality, 15, 320, 323–326, 324f, 325f, 330, 330t, 331, 334

      • design of, to reduce inequality in advanced economies, 8, 44–50, 54

      • design of, to reduce inequality in developing economies, 9, 65, 69–72, 73

      • determinants of redistributive effectiveness of, 59–62

      • in developing countries, 169

      • distributional effects of fiscal consolidation

      • based on, 10, 11, 31, 148–150, 149f, 162, 162b, 398

      • distributional outcomes of India’s, 16–17

      • employee wages, 32–33

      • generational accounting of benefit distribution, 6

      • IMF assistance in policy design for, 29

      • in India, 8, 370–371, 371f

      • magnitude and composition, 59–62, 60f

      • as mechanism for reducing inequality, 30, 37, 356

      • pension systems, 273, 275f

      • in Republic of Congo, 386, 386f, 387–390, 388f, 389f, 390f, 392–394, 393f

      • See also Education spending; Fiscal policy; Health spending; Social welfare programs; Transfer of wealth; Transfers

    • Public works programs, 71, 73, 89, 375–377, 376t

    R

    • Randomized evaluation, 81

    • Recession, during fiscal consolidation, 170, 171f

    • Recurrent net wealth taxes, 133–135, 133t, 136

    • Redistributive policies

      • beneficiaries of reduced commodity taxes, 224–225, 225f

      • challenges for India, 17

      • challenges for Republic of Congo, 17

      • challenges in assessing incidence of tax and spending, 4–5

      • compatibility of pro-growth policies and, 8, 29–30, 34

      • country inequality as determinant of, 295

      • designs for advanced economies, 8

      • designs for developing economies, 8–9

      • determinants of effectiveness of, 59–62

      • economic development status of countries and, 4

      • effectiveness of fiscal reforms in India, 378–383

      • evolution of theory and practice, 86–90, 355–357

      • fiscal consolidation strategies and, 10–11, 156, 170–172

      • fiscal policy designs for developing economies, 65–73

      • generational accounting, 6

      • growth-promoting, in China and Bric+ countries, 352–353

      • labor market outcomes considered in, 110

      • level of analysis, 5

      • life cycle analysis of, 5–6

      • methodologies for evaluating, 80–81

      • optimal tax theory analysis of, 338

      • outcomes in developing countries, 62–65

      • public support for, 26, 27f, 37, 57, 159–160, 161f

      • rationale for decentralized design and administration, 15

      • rationale for fiscal intervention, 3

      • social spending, 293

      • strategic options for developing and advanced economies, 12

      • targeted transfers versus reduced commodity taxes, 225–230

      • tax based vs. expenditure-based fiscal consolidation, 148–150, 149f

    • Retirement age, 46

    • Romania, 32

      • fiscal policy response to global financial crisis, 163–164, 165b, 166f, 167f, 168f, 169

    • Royalties, 186

    • Russia. See BRIC+ countries

    S

    • Safety net programs, 8, 11, 27, 34, 71, 89, 172, 262, 365, 390, 391b. See also Social spending programs

    • Senegal, 211

    • Serbia

      • tax policy, 208–209

      • tax system, 210, 211

    • Sin taxes, 16–17, 53, 65, 371–373, 378, 379t, 380

    • Social protection programs

      • challenges in assessing distributional effects of, 5

      • decentralization trends, 325–326, 326f

      • in developing countries, 169

      • effects of macroeconomic crises on conceptualization of, 89

      • leakage to non-poor, 62–64, 64f

      • redistributive impact of, in developing countries, 62–65, 73

      • reforms to decrease inequality in advanced economies, 46–50

      • in Republic of Congo, 390, 391b, 394

      • spending trends, 294–295

      • targeting, 65, 70, 72, 85, 226–229

      • types of redistributive, 293

      • work disincentives in, 47–49, 50

      • See also Education spending; Health spending; Safety net programs

    • South Africa

      • income inequality in, 58

      • poverty patterns, 81

      • property tax regime, 196

      • social spending, 297, 311

      • See also Commitment to Equity Project, health and education spending in

    • Spain

      • fiscal policy response to global financial crisis, 163–164, 165b, 166f, 167f, 168f, 169

      • redistributive effects of fiscal policy, 33

      • tax policy, 133

      • wealth distribution, 126

      • wealth inequality in, 40

    • Stamp duties, 211

    • Standardized World Income Inequality Database, 142

    • Student loans, 45

    • Sub-Saharan Africa

      • health spending in, 27–29, 28f

      • impact of fuel price increases, 258

      • inequality trends, 23, 58, 322, 322f

      • social insurance coverage, 62

      • tax ratios, 66

    • Sweden

      • carbon tax incidence, 242

      • carbon tax price impacts, 243

      • income inequality in, 40

      • social spending, 299

      • tax policy, 125

      • wealth distribution, 40–41, 126, 127

    • Switzerland

      • carbon tax incidence, 242

      • carbon tax price impacts, 243

      • tax policy, 133

      • wealth distribution, 40, 126

    T

    • Tagging, 65, 382–282

    • Tariffs, 5

    • Tax information and exchange agreements, 185

    • Tax policy

      • challenges in assessing distributional effects of, 4–5

      • China’s, 352, 353, 357, 358f, 363, 364, 365

      • consideration of spending programs in design of, 4

      • designs for reducing inequality in advanced economies, 54

      • determinants of redistributive effectiveness, 59–62

      • distributional outcomes in advanced economies, 42–43, 43f

      • equity–efficiency analysis, 15, 69, 337

      • flat-tax reforms, 16, 344–345, 344t

      • generational accounting of benefit distribution, 6

      • IMF assistance in design of, 29

      • India’s, 16–17, 369, 371–373, 378, 379t, 380–383

      • in-work benefits design, 49, 49b, 340, 347–348, 347t, 349

      • mortgage interest deduction, 50–51

      • on property transactions, 10

      • as redistributive instrument for income inequality, 12, 30, 37, 356–357

      • as redistributive instrument for wealth inequality, 10

      • to reduce wealth inequality, 121

      • for reducing inequality in advanced economies, 8, 50–53

      • for reducing inequality in developing economies, 8–9, 65, 66–69, 73

      • reform strategies for Republic of Congo, 392–393

      • treatment of pension incomes, 46–47, 282–284, 283f

      • on wealth transfers, 10

      • See also Corporate income tax; Dutch tax-benefit system; Fiscal policy; Income tax; Property tax; Tax revenue; Wealth taxes

    • Tax revenue

      • in Brazil, 399

      • in China, 364

      • decentralized administration of, and inequality, 320, 330, 330t, 333

      • distributional effects of fiscal consolidation based on, 10, 11, 31, 148–150, 149f, 162, 162b, 398

      • in India, 371f

      • international cooperation on collection, 134

      • magnitude and composition, 59–62, 60f, 61f, 248, 248f

      • from property and financial transactions, 132, 136

      • from property taxes, 194–198, 195f, 196f, 197f

      • ratios in developing countries, 66, 67, 68

      • from recurrent taxes on net wealth, 133–134, 136

      • in Republic of Congo, 386–387, 386f, 387f

      • as source of government revenue, 10

      • in United States, 248, 248f

      • from wealth taxes, 128–129, 129f, 130t

      • See also Tax policy

    • Tax-sparing agreements, 186

    • Tax treaties, 11–12

    • Tobacco taxation, 373, 378, 379t

    • Trade openness, 364

    • Trade unions, 342–343

    • Transaction taxes, 10, 53, 132–133, 132b, 136, 201, 211

    • Transfers

      • distributional outcomes in advanced economies, 42–43, 43f

      • effects of macroeconomic crises on conceptualization of, 89

      • Indian social programs, 373–377, 379–383, 380t

      • in-kind, 43, 44f

      • as instrument for reducing inequality in Brazil, 397

      • as instrument for reducing inequality in developing countries, 65

      • progressivity, 307, 308f, 377b

      • versus reduced commodity taxes, 225–230

      • targeting effectiveness, 377b

      • work disincentives in, 47–49, 50

    • Tunisia, 196

    U

    • Uganda

      • energy subsidies, 264

      • tax policy, 209

    • Unemployment benefits, 50

    • United Kingdom

      • fiscal policy response to global financial crisis, 163, 164, 165b, 166f, 167f, 168f

      • income inequality in, 40

      • inequality trends, 101–102, 102t

      • intergenerational income mobility, 41

      • property tax regime, 196, 197

      • redistributive effects of fiscal policy, 33

      • tax policy, 53, 211, 225–226, 225f, 340

      • wealth distribution, 126

      • wealth inequality in, 40

    • United States

      • carbon tax incidence, 244–245, 245f, 248–249, 248f

      • carbon tax price impacts, 243

      • composition of household wealth, 125

      • federal tax burden, by type, 248f

      • household wealth, 40, 123

      • income inequality in, 40

      • inequality trends, 101–102, 102t

      • intergenerational income mobility, 41

      • pension system, 6, 284

      • property tax regime, 194, 194t, 196

      • social spending, 299

      • tax policy, 340

      • wealth inequality in, 40, 41, 126, 127

    • Urbanization, 198, 199b, 208, 356, 357

    • Uruguay

      • social spending, 308, 311

      • See also Commitment to Equity Project, health and education spending in

    V

    • Value-added taxes

      • assessing distributional effects of, 4, 5

      • Brazil’s, 399

      • challenges to policy reform and implementation, 12–13

      • China’s, 357

      • design trends, 224, 224t

      • progressivity of, 69

      • redistributive effects in advanced economies, 43, 53

      • redistributive effects in developing economies, 62

      • reduced rates for poor consumers, 223–225, 229, 230

      • reform strategies for Republic of Congo, 393

    • Vertical equity, 14, 277–278, 278t, 279t, 280, 281f

    W

    • Wages

      • corporate income tax burden on, 68

      • determinants of changes in labor share of growth, 99–100, 106–107, 106t, 109t

      • determinants of dispersion of, 109, 110t

      • dispersion of labor share of income as determinant of inequality, 10, 98, 102, 103–105, 103f, 107, 109, 109t, 110

      • distributional effects of fiscal consolidation designs on income derived from, 150, 151f, 161

      • modeling of labor income share and distribution, 100–102, 105–106, 111–118

      • public employee, 32–33

      • share of economic growth, income inequality and, 97–98, 98f, 101–110, 104t, 109t

      • See also Factor share distribution

    • Wealth inequality

      • defined, 38

      • drivers of, 127

      • growth and, 121

      • income inequality and, 40, 121, 126, 126f, 356

      • international comparison among advanced economies, 40, 40f

      • negative effects of, 10

      • strategies to reduce, 121

      • taxation as redistributive instrument for, 10, 127–136

      • trends in advanced economies, 40–41, 121, 126–127

    • Wealth taxes, 10

      • capital income taxes and, 128

      • negative effects of, 128

      • policy designs to increase revenue from, 52–53, 129–135, 136

      • progressivity, 127

      • on recurrent net wealth, 133–135, 133t

      • revenue from, 128–129, 129f, 135

      • trends, 52, 129

      • types of, 52, 127, 136

    • World Bank, 27, 84–85

    • World Income Inequality Databases, 79

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