The Distributional Impact of Taxes and Social Spending in Romania
The combined effect of taxes and social spending in Romania helps to reduce inequality, although less so than in other European Union countries. However, the combination of direct and indirect taxes and transfers leads to an increase in poverty, as...
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/915561535028397212/The-distributional-impact-of-taxes-and-social-spending-in-Romania http://hdl.handle.net/10986/30292 |
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okr-10986-302922021-06-08T14:42:47Z The Distributional Impact of Taxes and Social Spending in Romania Inchauste, Gabriela Militaru, Eva TAXATION SOCIAL SPENDING DISTRIBUTIONAL IMPACT FISCAL POLICY FISCAL INCIDENCE INEQUALITY POVERTY TAXES INDIRECT TAX SOCIAL ASSISTANCE TAX RELIEF VALUE-ADDED TAX POVERTY RATE TARGETING The combined effect of taxes and social spending in Romania helps to reduce inequality, although less so than in other European Union countries. However, the combination of direct and indirect taxes and transfers leads to an increase in poverty, as direct cash transfers to poor households are not large enough to compensate them for the burden of indirect taxes. This is especially important for rural households and families with children. Moreover, recent reductions in the rates for personal income and value-added taxes are expected to have led to an increase in inequality, as most of the tax relief accrued to the top of the income distribution. Although these changes likely helped to reduce poverty, they were an expensive way to achieve a small decline in the poverty rate. Higher and better targeted social assistance spending could have achieved better distributional results at a much lower fiscal cost. These results call for greater use of simulation tools that could inform policy makers and the public of the fiscal costs and redistributive impacts of proposed reforms. 2018-08-23T19:21:23Z 2018-08-23T19:21:23Z 2018-08 Working Paper http://documents.worldbank.org/curated/en/915561535028397212/The-distributional-impact-of-taxes-and-social-spending-in-Romania http://hdl.handle.net/10986/30292 English Policy Research Working Paper;No. 8565 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Romania |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
TAXATION SOCIAL SPENDING DISTRIBUTIONAL IMPACT FISCAL POLICY FISCAL INCIDENCE INEQUALITY POVERTY TAXES INDIRECT TAX SOCIAL ASSISTANCE TAX RELIEF VALUE-ADDED TAX POVERTY RATE TARGETING |
| spellingShingle |
TAXATION SOCIAL SPENDING DISTRIBUTIONAL IMPACT FISCAL POLICY FISCAL INCIDENCE INEQUALITY POVERTY TAXES INDIRECT TAX SOCIAL ASSISTANCE TAX RELIEF VALUE-ADDED TAX POVERTY RATE TARGETING Inchauste, Gabriela Militaru, Eva The Distributional Impact of Taxes and Social Spending in Romania |
| geographic_facet |
Europe and Central Asia Romania |
| relation |
Policy Research Working Paper;No. 8565 |
| description |
The combined effect of taxes and social
spending in Romania helps to reduce inequality, although
less so than in other European Union countries. However, the
combination of direct and indirect taxes and transfers leads
to an increase in poverty, as direct cash transfers to poor
households are not large enough to compensate them for the
burden of indirect taxes. This is especially important for
rural households and families with children. Moreover,
recent reductions in the rates for personal income and
value-added taxes are expected to have led to an increase in
inequality, as most of the tax relief accrued to the top of
the income distribution. Although these changes likely
helped to reduce poverty, they were an expensive way to
achieve a small decline in the poverty rate. Higher and
better targeted social assistance spending could have
achieved better distributional results at a much lower
fiscal cost. These results call for greater use of
simulation tools that could inform policy makers and the
public of the fiscal costs and redistributive impacts of
proposed reforms. |
| format |
Working Paper |
| author |
Inchauste, Gabriela Militaru, Eva |
| author_facet |
Inchauste, Gabriela Militaru, Eva |
| author_sort |
Inchauste, Gabriela |
| title |
The Distributional Impact of Taxes and Social Spending in Romania |
| title_short |
The Distributional Impact of Taxes and Social Spending in Romania |
| title_full |
The Distributional Impact of Taxes and Social Spending in Romania |
| title_fullStr |
The Distributional Impact of Taxes and Social Spending in Romania |
| title_full_unstemmed |
The Distributional Impact of Taxes and Social Spending in Romania |
| title_sort |
distributional impact of taxes and social spending in romania |
| publisher |
World Bank, Washington, DC |
| publishDate |
2018 |
| url |
http://documents.worldbank.org/curated/en/915561535028397212/The-distributional-impact-of-taxes-and-social-spending-in-Romania http://hdl.handle.net/10986/30292 |
| _version_ |
1764471667606683648 |