Percorrer por autor "Mariana Isabel Sanches Felizardo"
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- The overall redistributive effect and progressivity of the Portuguese tax-transfer systemPublication . Mariana Isabel Sanches Felizardo; Alves, NunoThe redistribution effect of the tax-transfer system is a first-order issue for policymakers. The degree of progressivity of taxes and transfers plays a central role in this respect. We apply the Kakwani index to evaluate the redistributive effect and progressivity of the overall tax and transfer system - including cash transfers, direct taxes and indirect tax liabilities - for Portugal in 2010 and 2015. To the best of our knowledge, this computation is novel for the Portuguese case. The first stage of our research project involves using parametric statistical techniques to link expenditure data from the HBS dataset with information on income and transfers from the EU-SILC. After building this new dataset, we assess both the overall redistributive effect and progressivity of the tax-transfer system, as well as the contribution of each tax and benefit instrument. Our empirical analysis shows that the overall redistributive effect translates into an inequality reduction of approximately 6 and 7 Gini percentage points, respectively for 2010 and 2015. The decrease in inequality is mainly driven by direct taxes, and this impact increased between 2010 and 2015. Corroborating the existing literature, cash benefits and direct taxes are progressive, while indirect taxes are regressive. The overall tax-transfer system is progressive. From 2010 to 2015, the Portuguese tax-transfer system became less progressive, yet the overall redistribution effect increased, mostly due to increased average direct tax rates.