06. inequality & the redistribution of income
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Transcript of 06. inequality & the redistribution of income
Inequality and theInequality and theRedistribution of IncomeRedistribution of Income
Inequality and the Redistribution of IncomeInequality and the Redistribution of Income
Inequality and PovertyInequality and Poverty
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Types of inequality size distribution of income functional distribution of income distribution of income by recipient distribution of wealth poverty: absolute and relative
Measuring the size distribution of income Lorenz curves
Types of inequality size distribution of income functional distribution of income distribution of income by recipient distribution of wealth poverty: absolute and relative
Measuring the size distribution of income Lorenz curves
Lorenz curveLorenz curve
O
100
O 10020 40 60 80
20
40
60
80
Line of completeequality
Pe
rce
nta
ge
sh
are
of
nat
ion
al i
nco
me
(cu
mul
ativ
e)
Percentage of population
Lorenz curveLorenz curve
O
100
O 10020 40 60 80
20
40
60
80
Line of completeequality
Lorenz curve
Pe
rce
nta
ge
sh
are
of
nat
ion
al i
nco
me
(cu
mul
ativ
e)
Percentage of population
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Types of inequality size distribution of income functional distribution of income distribution of income by recipient distribution of wealth poverty: absolute and relative
Measuring the size distribution of income Lorenz curves Gini coefficients
Types of inequality size distribution of income functional distribution of income distribution of income by recipient distribution of wealth poverty: absolute and relative
Measuring the size distribution of income Lorenz curves Gini coefficients
Lorenz curve and Gini coefficientLorenz curve and Gini coefficient
O
100
O 10020 40 60 80
20
40
60
80
Line of completeequality
Lorenz curve
A
BPe
rce
nta
ge
sh
are
of
nat
ion
al i
nco
me
(cu
mul
ativ
e)
Percentage of population
Gini coefficient = A / (A + B)
Lorenz curve: UK households’ pre-tax incomes: 2000/1Lorenz curve: UK households’ pre-tax incomes: 2000/1
O
100
O 10020 40 60 80
20
40
60
80
24.6Lorenz curve
x
50
Pe
rce
nta
ge
sh
are
of
nat
ion
al i
nco
me
(cu
mul
ativ
e)
Percentage of population
Lorenz curves for two countries with the same Gini coefficientLorenz curves for two countries with the same Gini coefficient
O
100
O 10020 40 60 80
20
40
60
80
Pe
rce
nta
ge
sh
are
of
nat
ion
al i
nco
me
(cu
mul
ativ
e)
Percentage of population
Country A
Country B
XX
YY
Area X = area Y
Types of inequality size distribution of income
functional distribution of income
distribution of income by recipient
distribution of wealth
poverty: absolute and relative
Measuring the size distribution of income Lorenz curves
Gini coefficients
ratios of shares of quantile groups
Types of inequality size distribution of income
functional distribution of income
distribution of income by recipient
distribution of wealth
poverty: absolute and relative
Measuring the size distribution of income Lorenz curves
Gini coefficients
ratios of shares of quantile groups
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Ratio of income shares of bottom 40% to top 20%of households (after taxes and benefits)
Ratio of income shares of bottom 40% to top 20%of households (after taxes and benefits)
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Distribution in the UK size distribution
Distribution in the UK size distribution
Size distribution of UK income byquintile group of households: 2000/1
Size distribution of UK income byquintile group of households: 2000/1
Bottom20%
Next 20%
Middle20%
Next 20%
Top20%
15%15%
25%25%
51%51%
7%7%
2%2%
Income beforetaxes and benefits
Size distribution of UK income byquintile group of households: 2000/1
Size distribution of UK income byquintile group of households: 2000/1
Bottom20%
Next 20%
Middle20%
Next 20%
Top20%
15%15%
25%25%
51%51%
7%7%
2%2%
Bottom20%
Next 20%
Middle20%
Next 20%
Top20%
11%11%
16%16%
22%22%
45%45%
6%6%
Income beforetaxes and benefits
Income aftertaxes and benefits
Percentage shares of income before and after taxby decile group of households: 2000/1
Percentage shares of income before and after taxby decile group of households: 2000/1
% o
f in
com
e
Source: Economic Trends (ONS, April 2002)
15.712.9
11.19.0
7.66.0
4.7 3.82.5
26.8
0
5
10
15
20
25
30
Top 10% 11 to 20 21 to 30 31 to 40 41 to 50 51 to 60 61 to 70 71 to 80 81 to 90 Bottom10%
Income before tax
Percentage shares of income before and after taxby decile group of households: 2000/1
Percentage shares of income before and after taxby decile group of households: 2000/1
% o
f in
com
e
Source: Economic Trends (ONS, April 2002)
15.712.9
11.19.0
7.66.0
4.7 3.82.5
25.8
15.212.6
10.9
7.86.3 5.2 4.2
2.8
26.8
9.1
0
5
10
15
20
25
30
Top 10% 11 to 20 21 to 30 31 to 40 41 to 50 51 to 60 61 to 70 71 to 80 81 to 90 Bottom10%
Income before tax
Income after tax
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Distribution in the UK size distribution functional
by source
Distribution in the UK size distribution functional
by source
Sources of UK household income as apercentage of gross household incomeSources of UK household income as apercentage of gross household income
1975
1%
77%
6%
4%2%2% 10%
Wages and salaries Income from self employment Investment income
Pensions, annuities Social security benefits Other
Source: Family Spending (ONS, 2002)
Sources of UK household income as apercentage of gross household incomeSources of UK household income as apercentage of gross household income
1975 2000/1
67%9%
4%
7%
12%
1%1%
77%
6%
4%2%2% 10%
Wages and salaries Income from self employment Investment income
Pensions, annuities Social security benefits Other
Source: Family Spending (ONS, 2002)
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Distribution in the UK size distribution functional
by sourceby occupation
Distribution in the UK size distribution functional
by sourceby occupation
Average gross weekly earnings of UKfull-time adult male employees: 2001
Average gross weekly earnings of UKfull-time adult male employees: 2001
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household type
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household type
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household typehousehold composition
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household typehousehold composition
£0
£100
£200
£300
£400
£500
£600
£700
Gross income
Weekly income for different types of UK households: 2000/1
Weekly income for different types of UK households: 2000/1
Source: Family spending (ONS,2002)
One adult(not retired)
One adult, two ormore children
One man, one woman(not retired)
Two adults, fouror more children
£0
£100
£200
£300
£400
£500
£600
£700
Gross incomeDisposable income
Weekly income for different types of UK households: 2000/1
Weekly income for different types of UK households: 2000/1
Source: Family spending (ONS,2002)
One adult(not retired)
One adult, two ormore children
One man, one woman(not retired)
Two adults, fouror more children
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household typehousehold compositionsex
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household typehousehold compositionsex
£0 £200 £400 £600 £800 £1,000
Bar staff
Sales assistants
Clerks
Secretaries
Nurses
Police officers
Secondary teachers
Personnel managers
Financial managers
Medical practitioners
Average gross weekly earnings ofUK full-time adult female employees: 2001
Average gross weekly earnings ofUK full-time adult female employees: 2001
0 200 400 600 800 1000 1200
Bar staff
Sales assistants
Clerks
Factory lineworkers
Nurses
Secondary teachers
Personnel managers
Medical practioners
Financial managers
Women's earnings
Men's earnings
Average gross weekly earnings ofUK full-time adult employees: 2001Average gross weekly earnings ofUK full-time adult employees: 2001
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household typehousehold compositionsexethnic group
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household typehousehold compositionsexethnic group
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household typehousehold compositionsexethnic group location
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household typehousehold compositionsexethnic group location
Gross weekly household income:Selected UK regions: 2000/1
Gross weekly household income:Selected UK regions: 2000/1
£200
£250
£300
£350
£400
£450
£500
£550
£600
£650
Source: Family spending (ONS,2002)
No
rth
-Ea
stN
ort
h-E
ast
N. I
rela
nd
N. I
rela
nd
We
st M
idla
nd
sW
est
Mid
lan
ds
Sc
otl
an
dS
co
tla
nd
So
uth
-Ea
st
So
uth
-Ea
st
Lo
nd
on
Lo
nd
on
UK
(a
ver
age
)
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household typehousehold compositionsexethnic group location
distribution of wealth
Distribution in the UK size distribution functional
by sourceby occupation
inequality by person/household typehousehold compositionsexethnic group location
distribution of wealth
Composition of UK wealthComposition of UK wealth
1971
Stocks and shares Notes, coin and deposits with banks, etc.
Tenancy rights Other fixed assets Dwellings (net ofmortgage debt)
Life assurance and pension funds
26%
15%
23%
7%
12%12%
23%23%
Other financial assets (net of liabilities)
– 6%
Composition of UK wealthComposition of UK wealth
1971 2000
Stocks and shares Notes, coin and deposits with banks, etc.
Tenancy rights Other fixed assets Dwellings (net ofmortgage debt)
Life assurance and pension funds
35%
16%26%
15%
14%
5%
3%3%26%26%
23%
7%
12%12%
23%23%
Other financial assets (net of liabilities)
– 6%
1%1%
The causes of inequality inequality of wealth differences in workers’
ability; qualifications attitudes hours worked economic power qualifications
differences in demand for goods differences in household composition discrimination degree of government support unemployment
Government attitudes towards inequality
The causes of inequality inequality of wealth differences in workers’
ability; qualifications attitudes hours worked economic power qualifications
differences in demand for goods differences in household composition discrimination degree of government support unemployment
Government attitudes towards inequality
INEQUALITY AND POVERTYINEQUALITY AND POVERTY
Inequality and the Redistribution of IncomeInequality and the Redistribution of Income
Taxes and BenefitsTaxes and Benefits
Role of taxes and benefits
redistribution of income
achievement of social efficiency
macroeconomic management
Requirements of a good tax system
Types of tax
direct taxes
indirect taxes
Role of taxes and benefits
redistribution of income
achievement of social efficiency
macroeconomic management
Requirements of a good tax system
Types of tax
direct taxes
indirect taxes
TAXES AND BENEFITSTAXES AND BENEFITS
Balance of taxation in different countriesBalance of taxation in different countries
Taxes and the redistribution of income progressive taxes
regressive taxes(including lump-sum taxes)
proportional taxes
Taxes and the redistribution of income progressive taxes
regressive taxes(including lump-sum taxes)
proportional taxes
TAXES AND BENEFITSTAXES AND BENEFITS
O
To
tal t
ax
pai
d (
T)
Total income (Y)
Proportional
Regressive
Lump-sum
Progressive
Different types of tax: (a) total tax paidDifferent types of tax: (a) total tax paid
O
Total income (Y)
Proportional
Progressive
Regressive
Lump-sum
Ave
rag
e ta
x p
aid
(T
/Y)
Different types of tax: (b) average tax paidDifferent types of tax: (b) average tax paid
Taxes and the redistribution of income progressive taxes
regressive taxes(including lump-sum taxes)
proportional taxes
UK taxes and the redistribution of incomes direct taxes
Taxes and the redistribution of income progressive taxes
regressive taxes(including lump-sum taxes)
proportional taxes
UK taxes and the redistribution of incomes direct taxes
TAXES AND BENEFITSTAXES AND BENEFITS
UK marginal income tax andnational insurance rates: 2002/3
UK marginal income tax andnational insurance rates: 2002/3
UK marginal income tax andnational insurance rates: 2002/3
UK marginal income tax andnational insurance rates: 2002/3
UK marginal income tax andnational insurance rates: 2002/3
UK marginal income tax andnational insurance rates: 2002/3
UK average income tax plusnational insurance rates: 2002/3
UK average income tax plusnational insurance rates: 2002/3
UK average and marginal rates of income tax fora single person: 2002/3
UK average and marginal rates of income tax fora single person: 2002/3
O
40
10
22
4615 6535 34 515(= 4615 + 29 900)
Ta
x ra
te (
%)
Individual’s pre-tax income (£)
Marginalrate
O
40
10
22
4615 6535 34 515(= 4615 + 29 900)
Ta
x ra
te (
%)
Individual’s pre-tax income (£)
Marginalrate
Averagerate
UK average and marginal rates of income tax fora single person: 2002/3
UK average and marginal rates of income tax fora single person: 2002/3
UK average and marginal rates ofincome tax plus NIC: 2002/3
UK average and marginal rates ofincome tax plus NIC: 2002/3
O
Ta
x ra
te (
%)
Individual’s pre-tax annual income (£)
4535
20
6415
40
Marginalrate
32
29 900 33 935
22
O
40
4615 6535 34 515
Ta
x ra
te (
%)
Individual’s pre-tax annual income (£)
Marginalrate
Averagerate
32
30 420
20
22
UK average and marginal rates ofincome tax plus NIC: 2002/3
UK average and marginal rates ofincome tax plus NIC: 2002/3
Taxes and the redistribution of income progressive taxes
regressive taxes(including lump-sum taxes)
proportional taxes
UK taxes and the redistribution of incomes direct taxes
indirect taxes
Taxes and the redistribution of income progressive taxes
regressive taxes(including lump-sum taxes)
proportional taxes
UK taxes and the redistribution of incomes direct taxes
indirect taxes
TAXES AND BENEFITSTAXES AND BENEFITS
Problems in using taxes to redistribute incomes
problems in achieving redistribution
how to help the very poor
tax evasion and avoidance
undesired incidence of taxation
Problems in using taxes to redistribute incomes
problems in achieving redistribution
how to help the very poor
tax evasion and avoidance
undesired incidence of taxation
TAXES AND BENEFITSTAXES AND BENEFITS
Incidence of an income tax: elastic supply of labourIncidence of an income tax: elastic supply of labour
O
Quantity of labour
S
D
W1
Q1
Wa
ge r
ate
O
Quantity of labour
S
D
S + tax
W1
Q1
Wa
ge r
ate
Incidence of an income tax: elastic supply of labourIncidence of an income tax: elastic supply of labour
O
Quantity of labour
S
D
S + tax
W1
Q1
W2
Q2
Wa
ge r
ate
Incidence of an income tax: elastic supply of labourIncidence of an income tax: elastic supply of labour
O
Wa
ge r
ate
Quantity of labour
S
D
S + tax
W1
Q1
W2
Q2
W2 - tax
Incidence of an income tax: elastic supply of labourIncidence of an income tax: elastic supply of labour
O
Wa
ge r
ate
Quantity of labour
S
D
S + tax
W1
Q1
W2
Q2
W2 - tax AA
A: A: worker share of taxworker share of tax
Incidence of an income tax: elastic supply of labourIncidence of an income tax: elastic supply of labour
O
Wa
ge r
ate
Quantity of labour
S
D
S + tax
W1
Q1
W2
Q2
W2 - tax
BB
AA B: employer share of tax
A: A: worker share of taxworker share of tax
Incidence of an income tax: elastic supply of labourIncidence of an income tax: elastic supply of labour
Incidence of an income tax: inelastic supply of labourIncidence of an income tax: inelastic supply of labour
O
Wa
ge r
ate
Quantity of labour
S
D
W1
Q1
O
Wa
ge r
ate
Quantity of labour
S
D
S + tax
W1
Q1Q2
W2
Incidence of an income tax: inelastic supply of labourIncidence of an income tax: inelastic supply of labour
Q2O
Wa
ge r
ate
Quantity of labour
S
D
S + tax
W1
Q1
W2
W2 - tax
Incidence of an income tax: inelastic supply of labourIncidence of an income tax: inelastic supply of labour
Q2O
Wa
ge r
ate
Quantity of labour
S
D
S + tax
W1
Q1
W2
W2 - taxAA A: A: worker share of taxworker share of tax
Incidence of an income tax: inelastic supply of labourIncidence of an income tax: inelastic supply of labour
Q2O
Wa
ge r
ate
Quantity of labour
S
D
S + tax
W1
Q1
W2
W2 - tax
BB
AA
B: B: employer share of taxemployer share of tax
A: A: worker share of taxworker share of tax
Incidence of an income tax: inelastic supply of labourIncidence of an income tax: inelastic supply of labour
O
Wag
e ra
te
Quantity of labour
S
D
S + tax
W1
Q1
W2
Q2
W2 - tax
BB
AA B: employer share of tax
A: A: worker share of taxworker share of tax
Incidence of an income tax: elastic supply of labourIncidence of an income tax: elastic supply of labour
Q2OW
age
rate
Quantity of labour
S
D
S + tax
W1
Q1
W2
W2 - tax
BB
AA
B: B: employer share of taxemployer share of tax
A: A: worker share of taxworker share of tax
Incidence of an income tax: inelastic supply of labourIncidence of an income tax: inelastic supply of labour
Problems in using taxes to redistribute incomes
problems in achieving redistribution
how to help the very poor
tax evasion and avoidance
undesired incidence of taxation
economic costs of redistribution
Problems in using taxes to redistribute incomes
problems in achieving redistribution
how to help the very poor
tax evasion and avoidance
undesired incidence of taxation
economic costs of redistribution
TAXES AND BENEFITSTAXES AND BENEFITS
Problems in using taxes to redistribute incomes
problems in achieving redistribution
how to help the very poor
tax evasion and avoidance
undesired incidence of taxation
economic costs of redistribution
distortionary effects of taxes
Problems in using taxes to redistribute incomes
problems in achieving redistribution
how to help the very poor
tax evasion and avoidance
undesired incidence of taxation
economic costs of redistribution
distortionary effects of taxes
TAXES AND BENEFITSTAXES AND BENEFITS
Problems in using taxes to redistribute incomes
problems in achieving redistribution
how to help the very poor
tax evasion and avoidance
undesired incidence of taxation
economic costs of redistribution
distortionary effects of taxes
deadweight welfare loss of taxes
Problems in using taxes to redistribute incomes
problems in achieving redistribution
how to help the very poor
tax evasion and avoidance
undesired incidence of taxation
economic costs of redistribution
distortionary effects of taxes
deadweight welfare loss of taxes
TAXES AND BENEFITSTAXES AND BENEFITS
Indirect tax applied to good XIndirect tax applied to good X
OQuantity
S
D
P1
Q1
£
O
S
D
S + tax
P1
Q1Quantity
£
P2Tax
Q2
Indirect tax applied to good XIndirect tax applied to good X
O
S (=MC)
D
S + tax
P1
Q1Quantity
£
Q2
P2
P2 - tax
Indirect tax applied to good XIndirect tax applied to good X
S + tax
O
S (=MC)
D
P1
Q1Quantity
£
Q2
P2
P2 - tax
CC
BB AA
Indirect tax applied to good XIndirect tax applied to good X
S + tax
O
DD
S (=MC)
D
P1
Q1Quantity
£
Q2
P2
P2 - tax
CC
BB AAEE
FF
Indirect tax applied to good XIndirect tax applied to good X
Problems in using taxes to redistribute incomes problems in achieving redistribution
how to help the very poor
tax evasion and avoidance
undesired incidence of taxation
economic costs of redistributiondistortionary effects of taxes
deadweight welfare loss of taxes
disincentives
Problems in using taxes to redistribute incomes problems in achieving redistribution
how to help the very poor
tax evasion and avoidance
undesired incidence of taxation
economic costs of redistributiondistortionary effects of taxes
deadweight welfare loss of taxes
disincentives
TAXES AND BENEFITSTAXES AND BENEFITS
0
To
tal t
ax
reve
nu
e
Average tax rate (%)
100
A Laffer curveA Laffer curve
0
To
tal t
ax
reve
nu
e
Average tax rate (%)
100
R max.
t1
A Laffer curveA Laffer curve
Taxation and incentives income and substitution effects of higher
taxes
different effects on different types of people
different types of tax increase raising the higher rates of tax
raising the basic rate
reducing tax allowances
The effects of tax cuts
Taxation and incentives income and substitution effects of higher
taxes
different effects on different types of people
different types of tax increase raising the higher rates of tax
raising the basic rate
reducing tax allowances
The effects of tax cuts
TAXES AND BENEFITSTAXES AND BENEFITS
O
Budget line
(a) The position with no income tax
(a) The position with no income tax
Da
ily in
com
e
Leisure (hours)
Ymax
Lmax
Tax cuts and incentivesTax cuts and incentives
O
I3
I2
I1Budget
line
Da
ily in
com
e
Leisure (hours)
Ymax
Lmax
(a) The position with no income tax
(a) The position with no income tax
Tax cuts and incentivesTax cuts and incentives
O
I3
I2
I1Budget
line
Y*
L*
Da
ily in
com
e
Leisure (hours)
Ymax
Lmax
(a) The position with no income tax
(a) The position with no income tax
Tax cuts and incentivesTax cuts and incentives
O
I4
I3
I1
(b) The position with income tax(b) The position with income tax
Da
ily in
com
e
Leisure (hours)
Ymax
Lmax
I2
Y2
Y1
Tax cuts and incentivesTax cuts and incentives
O
I4
I3
I1
Y**
Da
ily in
com
e
Leisure (hours)
Ymax
Lmax
I2
L**
Y2
Y1
b
(b) The position with income tax(b) The position with income tax
Tax cuts and incentivesTax cuts and incentives
O
I4
I3
I1
Y**
L*
Da
ily in
com
e
Leisure (hours)
Ymax
Lmax
I2
L**
Y2
Y1
a
b
(b) The position with income tax(b) The position with income tax
Tax cuts and incentivesTax cuts and incentives
O
(c) Cut in the basic rate of tax
(c) Cut in the basic rate of tax
Da
ily in
com
e
Leisure (hours)
Tax cuts and incentivesTax cuts and incentives
O
Da
ily in
com
e
Leisure (hours)
r
Person W
LW1
(c) Cut in the basic rate of tax
(c) Cut in the basic rate of tax
Tax cuts and incentivesTax cuts and incentives
O
Da
ily in
com
e
Leisure (hours)
s
r
Person W
LW1LW2
(c) Cut in the basic rate of tax
(c) Cut in the basic rate of tax
Tax cuts and incentivesTax cuts and incentives
O
Da
ily in
com
e
Leisure (hours)
s
r
q
Person X
Person W
LW1LW2
LX
(c) Cut in the basic rate of tax
(c) Cut in the basic rate of tax
Tax cuts and incentivesTax cuts and incentives
O
(d) Increase in thetax threshold
(d) Increase in thetax threshold
Da
ily in
com
e
Leisure (hours)
t
r
Tax cuts and incentivesTax cuts and incentives
O
Da
ily in
com
e
Leisure (hours)
L1
(d) Increase in thetax threshold
(d) Increase in thetax threshold
Tax cuts and incentivesTax cuts and incentives
O
Da
ily in
com
e
Leisure (hours)
L1 L2
(d) Increase in thetax threshold
(d) Increase in thetax threshold
Tax cuts and incentivesTax cuts and incentives
TAXES AND BENEFITSTAXES AND BENEFITS
Cash benefits
means-tested benefits
universal benefits
Benefits in kind
Benefits and the redistribution of income
Cash benefits
means-tested benefits
universal benefits
Benefits in kind
Benefits and the redistribution of income
0
1000
2000
3000
4000
5000
6000
7000
8000B
elgi
um
Den
mar
k
Fran
ce
Ger
man
y
Gre
ece
Irela
nd
Italy
Net
her
lan
ds
Por
tuga
l
Spa
in
Sw
eden U
K
EU
15
1999
Social protection benefits in variousEuropean countries: (a) €per headSocial protection benefits in variousEuropean countries: (a) €per head
Source: Eurostat, 2002
Eu
ro p
er h
ead
0
5
10
15
20
25
30
35B
elgi
um
Den
mar
k
Fran
ce
Ger
man
y
Gre
ece
Irela
nd
Italy
Net
her
lan
ds
Por
tuga
l
Spa
in
Sw
eden U
K
EU
15
1990
1999
Social protection benefits in variousEuropean countries: (b) % of GDP
Social protection benefits in variousEuropean countries: (b) % of GDP
Source: Eurostat, 2002
% o
f G
DP
TAXES AND BENEFITSTAXES AND BENEFITS
The problem of the poverty trap
an argument for universal benefits
problems with universal benefits
The negative income tax system
how it would work
The problem of the poverty trap
an argument for universal benefits
problems with universal benefits
The negative income tax system
how it would work
A negative income tax systemA negative income tax system
A negative income tax system
A negative income tax system
A negative income tax system
TAXES AND BENEFITSTAXES AND BENEFITS
The problem of the poverty trap
an argument for universal benefits
problems with universal benefits
The negative income tax system
how it would work
advantages and disadvantages
The problem of the poverty trap
an argument for universal benefits
problems with universal benefits
The negative income tax system
how it would work
advantages and disadvantages