Discussion Papers no. 811

A common base answer to “Which country is most redistributive?”

Which country is most redistributive? This question is often discussed in terms of comparisons of measures of redistribution when each country’s tax schedule is applied to its pre-tax income distribution.

Which country is most redistributive? This question is often discussed in terms of comparisons of measures of redistribution when each country’s tax schedule is applied to its pre-tax income distribution. However, we believe that what most authors have in mind when referring to the “most redistributive country” is one in which the tax schedule is unanimously most redistributive across all pre-tax income distributions. A stronger identification of the most redistributive tax schedule therefore implies applying each tax schedule to all pre-tax income distributions and compare redistribution for all possible combinations. Given that this is practically complicated, we suggest applying the transplant-and-compare method of Dardanoni and Lambert (2002), which provides a tax progressivity ordering of schedules according to a common base. This paper shows how the transplant-and-compare approach can be utilized to approach an identification of the most redistributive country. The method and its implications are discussed by employing micro data from Luxembourg Income Studies, also contrasting results to those obtained using standard measures of redistribution.

About the publication

Title

A common base answer to “Which country is most redistributive?”

Authors

Thor Olav Thoresen, Peter J. Lambert, Runa Nesbakken

Series and number

Discussion Papers no. 811

Publisher

Statistics Norway

Topic

Discussion Papers

ISSN

1892-753X

Number of pages

15

Language

English

About Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.

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