Fiscal Redistribution and Income Inequality in Latin America

Income inequality in Latin America ranks among the highest in the world. It can be traced back to the unequal distribution of assets (especially land and education) in the region. But the extent to which asset inequality translates into income ine...

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Main Authors:	Goñi, Edwin, López, J. Humberto, Servén, Luis
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ADVERSE EFFECT AGRICULTURE AVERAGE INCOME BENCHMARK CAPITAL ASSETS CASH TRANSFER CASH TRANSFERS CENTRAL AMERICAN COL CONSUMPTION TAXES CONVENTIONAL INSTRUMENTS CORPORATE INCOME TAX CORPORATE TAX CORPORATE TAX RATE CORPORATE TAXES DATA AVAILABILITY DEDUCTIONS DEFICITS DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT STRATEGY DISPOSABLE INCOME DISTRIBUTION OF INCOME ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC LIFE ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC VOLATILITY EFFECTIVE TAX RATES EXPENDITURE EXPENDITURES FINANCES FINANCIAL CRISES FINANCIAL MARKET FINANCIAL TRANSACTIONS FISCAL POLICIES FISCAL POLICY GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GLOBAL ECONOMY GROSS INCOME HOLDING HOLDINGS HOUSEHOLD INCOME HUMAN CAPITAL INCENTIVE EFFECTS INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INCOME LEVELS INCOME SHOCKS INCOME TAX INCOME TAXES INCOMES INDEBTEDNESS INDIRECT TAXATION INDUSTRIAL COUNTRIES INSTITUTIONAL CONSTRAINTS INSURANCE INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL STANDARDS INTERVENTIONS LATIN AMERICAN LIQUIDITY MACROECONOMIC STABILITY MACROECONOMICS MICRODATA MIDDLE EAST MONETARY FUND NATURAL RESOURCES NORTH AFRICA PAYROLL TAXES PENSION PENSION SYSTEM PENSION SYSTEMS PENSIONS PER CAPITA INCOME PERSONAL INCOME PERSONAL INCOME TAX POVERTY REDUCTION PROGRAMS PROPERTY RIGHTS PUBLIC FINANCE PUBLIC GOOD PUBLIC POLICY PUBLIC SPENDING PURCHASING POWER RATE OF GROWTH REDISTRIBUTIVE EFFECTS SIMULATIONS SOCIAL ASSISTANCE SOCIAL PROGRAMS SOCIAL PROTECTION SOCIAL VALUE SUB-SAHARAN AFRICA TARGETING TAX TAX ADMINISTRATION TAX BASES TAX COLLECTION TAX COMPLIANCE TAX CONCESSIONS TAX EVASION TAX INCIDENCE TAX POLICY TAX RATE TAX RATES TAX RECEIPTS TAX REFORM TAX REVENUE TAX REVENUES TAX STRUCTURE TAX SYSTEM TAX SYSTEMS TAXABLE INCOME TAXPAYERS TRANSFER PAYMENTS TRANSITION ECONOMIES UNEMPLOYMENT VALUE ADDED VALUE ADDED TAXES VOLATILITY WEALTH WESTERN EUROPE
Online Access:	http://documents.worldbank.org/curated/en/2008/01/8962550/fiscal-redistribution-income-inequality-latin-america http://hdl.handle.net/10986/6468

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spelling	okr-10986-64682021-04-23T14:02:31Z Fiscal Redistribution and Income Inequality in Latin America Goñi, Edwin López, J. Humberto Servén, Luis ADVERSE EFFECT AGRICULTURE AVERAGE INCOME BENCHMARK CAPITAL ASSETS CASH TRANSFER CASH TRANSFERS CENTRAL AMERICAN COL CONSUMPTION TAXES CONVENTIONAL INSTRUMENTS CORPORATE INCOME TAX CORPORATE TAX CORPORATE TAX RATE CORPORATE TAXES DATA AVAILABILITY DEDUCTIONS DEFICITS DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT STRATEGY DISPOSABLE INCOME DISTRIBUTION OF INCOME ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC LIFE ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC VOLATILITY EFFECTIVE TAX RATES EXPENDITURE EXPENDITURES FINANCES FINANCIAL CRISES FINANCIAL MARKET FINANCIAL TRANSACTIONS FISCAL POLICIES FISCAL POLICY GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GLOBAL ECONOMY GROSS INCOME HOLDING HOLDINGS HOUSEHOLD INCOME HUMAN CAPITAL INCENTIVE EFFECTS INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INCOME LEVELS INCOME SHOCKS INCOME TAX INCOME TAXES INCOMES INDEBTEDNESS INDIRECT TAXATION INDUSTRIAL COUNTRIES INSTITUTIONAL CONSTRAINTS INSURANCE INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL STANDARDS INTERVENTIONS LATIN AMERICAN LIQUIDITY MACROECONOMIC STABILITY MACROECONOMICS MICRODATA MIDDLE EAST MONETARY FUND NATURAL RESOURCES NORTH AFRICA PAYROLL TAXES PENSION PENSION SYSTEM PENSION SYSTEMS PENSIONS PER CAPITA INCOME PERSONAL INCOME PERSONAL INCOME TAX POVERTY REDUCTION PROGRAMS PROPERTY RIGHTS PUBLIC FINANCE PUBLIC GOOD PUBLIC POLICY PUBLIC SPENDING PURCHASING POWER RATE OF GROWTH REDISTRIBUTIVE EFFECTS SIMULATIONS SOCIAL ASSISTANCE SOCIAL PROGRAMS SOCIAL PROTECTION SOCIAL VALUE SUB-SAHARAN AFRICA TARGETING TAX TAX ADMINISTRATION TAX BASES TAX COLLECTION TAX COMPLIANCE TAX CONCESSIONS TAX EVASION TAX INCIDENCE TAX POLICY TAX RATE TAX RATES TAX RECEIPTS TAX REFORM TAX REVENUE TAX REVENUES TAX STRUCTURE TAX SYSTEM TAX SYSTEMS TAXABLE INCOME TAXPAYERS TRANSFER PAYMENTS TRANSITION ECONOMIES UNEMPLOYMENT VALUE ADDED VALUE ADDED TAXES VOLATILITY WEALTH WESTERN EUROPE Income inequality in Latin America ranks among the highest in the world. It can be traced back to the unequal distribution of assets (especially land and education) in the region. But the extent to which asset inequality translates into income inequality depends on the redistributive capacity of the state. This paper documents the performance of Latin American fiscal systems from the perspective of income redistribution using newly-available information on the incidence of taxes and transfers across the region. The findings indicate that: (i) the differences in income inequality before taxes and transfers between Latin America and Western Europe are much more modest than those after taxes and transfers; (ii) the key reason is that, in contrast with industrial countries, in most Latin American countries the fiscal system is of little help in reducing income inequality; and (iii) in countries where fiscal redistribution is significant, it is achieved mostly through transfers rather than taxes. These facts stress the need for fiscal reforms across the region to further the goal of social equity. However, different countries need to place different relative emphasis on raising tax collection, restructuring the tax system, and improving the targeting of expenditures. 2012-05-25T20:17:05Z 2012-05-25T20:17:05Z 2008-01 http://documents.worldbank.org/curated/en/2008/01/8962550/fiscal-redistribution-income-inequality-latin-america http://hdl.handle.net/10986/6468 English Policy Research Working Paper; No. 4487 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ADVERSE EFFECT AGRICULTURE AVERAGE INCOME BENCHMARK CAPITAL ASSETS CASH TRANSFER CASH TRANSFERS CENTRAL AMERICAN COL CONSUMPTION TAXES CONVENTIONAL INSTRUMENTS CORPORATE INCOME TAX CORPORATE TAX CORPORATE TAX RATE CORPORATE TAXES DATA AVAILABILITY DEDUCTIONS DEFICITS DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT STRATEGY DISPOSABLE INCOME DISTRIBUTION OF INCOME ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC LIFE ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC VOLATILITY EFFECTIVE TAX RATES EXPENDITURE EXPENDITURES FINANCES FINANCIAL CRISES FINANCIAL MARKET FINANCIAL TRANSACTIONS FISCAL POLICIES FISCAL POLICY GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GLOBAL ECONOMY GROSS INCOME HOLDING HOLDINGS HOUSEHOLD INCOME HUMAN CAPITAL INCENTIVE EFFECTS INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INCOME LEVELS INCOME SHOCKS INCOME TAX INCOME TAXES INCOMES INDEBTEDNESS INDIRECT TAXATION INDUSTRIAL COUNTRIES INSTITUTIONAL CONSTRAINTS INSURANCE INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL STANDARDS INTERVENTIONS LATIN AMERICAN LIQUIDITY MACROECONOMIC STABILITY MACROECONOMICS MICRODATA MIDDLE EAST MONETARY FUND NATURAL RESOURCES NORTH AFRICA PAYROLL TAXES PENSION PENSION SYSTEM PENSION SYSTEMS PENSIONS PER CAPITA INCOME PERSONAL INCOME PERSONAL INCOME TAX POVERTY REDUCTION PROGRAMS PROPERTY RIGHTS PUBLIC FINANCE PUBLIC GOOD PUBLIC POLICY PUBLIC SPENDING PURCHASING POWER RATE OF GROWTH REDISTRIBUTIVE EFFECTS SIMULATIONS SOCIAL ASSISTANCE SOCIAL PROGRAMS SOCIAL PROTECTION SOCIAL VALUE SUB-SAHARAN AFRICA TARGETING TAX TAX ADMINISTRATION TAX BASES TAX COLLECTION TAX COMPLIANCE TAX CONCESSIONS TAX EVASION TAX INCIDENCE TAX POLICY TAX RATE TAX RATES TAX RECEIPTS TAX REFORM TAX REVENUE TAX REVENUES TAX STRUCTURE TAX SYSTEM TAX SYSTEMS TAXABLE INCOME TAXPAYERS TRANSFER PAYMENTS TRANSITION ECONOMIES UNEMPLOYMENT VALUE ADDED VALUE ADDED TAXES VOLATILITY WEALTH WESTERN EUROPE
spellingShingle	ADVERSE EFFECT AGRICULTURE AVERAGE INCOME BENCHMARK CAPITAL ASSETS CASH TRANSFER CASH TRANSFERS CENTRAL AMERICAN COL CONSUMPTION TAXES CONVENTIONAL INSTRUMENTS CORPORATE INCOME TAX CORPORATE TAX CORPORATE TAX RATE CORPORATE TAXES DATA AVAILABILITY DEDUCTIONS DEFICITS DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT STRATEGY DISPOSABLE INCOME DISTRIBUTION OF INCOME ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC LIFE ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC VOLATILITY EFFECTIVE TAX RATES EXPENDITURE EXPENDITURES FINANCES FINANCIAL CRISES FINANCIAL MARKET FINANCIAL TRANSACTIONS FISCAL POLICIES FISCAL POLICY GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GLOBAL ECONOMY GROSS INCOME HOLDING HOLDINGS HOUSEHOLD INCOME HUMAN CAPITAL INCENTIVE EFFECTS INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INCOME LEVELS INCOME SHOCKS INCOME TAX INCOME TAXES INCOMES INDEBTEDNESS INDIRECT TAXATION INDUSTRIAL COUNTRIES INSTITUTIONAL CONSTRAINTS INSURANCE INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL STANDARDS INTERVENTIONS LATIN AMERICAN LIQUIDITY MACROECONOMIC STABILITY MACROECONOMICS MICRODATA MIDDLE EAST MONETARY FUND NATURAL RESOURCES NORTH AFRICA PAYROLL TAXES PENSION PENSION SYSTEM PENSION SYSTEMS PENSIONS PER CAPITA INCOME PERSONAL INCOME PERSONAL INCOME TAX POVERTY REDUCTION PROGRAMS PROPERTY RIGHTS PUBLIC FINANCE PUBLIC GOOD PUBLIC POLICY PUBLIC SPENDING PURCHASING POWER RATE OF GROWTH REDISTRIBUTIVE EFFECTS SIMULATIONS SOCIAL ASSISTANCE SOCIAL PROGRAMS SOCIAL PROTECTION SOCIAL VALUE SUB-SAHARAN AFRICA TARGETING TAX TAX ADMINISTRATION TAX BASES TAX COLLECTION TAX COMPLIANCE TAX CONCESSIONS TAX EVASION TAX INCIDENCE TAX POLICY TAX RATE TAX RATES TAX RECEIPTS TAX REFORM TAX REVENUE TAX REVENUES TAX STRUCTURE TAX SYSTEM TAX SYSTEMS TAXABLE INCOME TAXPAYERS TRANSFER PAYMENTS TRANSITION ECONOMIES UNEMPLOYMENT VALUE ADDED VALUE ADDED TAXES VOLATILITY WEALTH WESTERN EUROPE Goñi, Edwin López, J. Humberto Servén, Luis Fiscal Redistribution and Income Inequality in Latin America
geographic_facet	Latin America & Caribbean
relation	Policy Research Working Paper; No. 4487
description	Income inequality in Latin America ranks among the highest in the world. It can be traced back to the unequal distribution of assets (especially land and education) in the region. But the extent to which asset inequality translates into income inequality depends on the redistributive capacity of the state. This paper documents the performance of Latin American fiscal systems from the perspective of income redistribution using newly-available information on the incidence of taxes and transfers across the region. The findings indicate that: (i) the differences in income inequality before taxes and transfers between Latin America and Western Europe are much more modest than those after taxes and transfers; (ii) the key reason is that, in contrast with industrial countries, in most Latin American countries the fiscal system is of little help in reducing income inequality; and (iii) in countries where fiscal redistribution is significant, it is achieved mostly through transfers rather than taxes. These facts stress the need for fiscal reforms across the region to further the goal of social equity. However, different countries need to place different relative emphasis on raising tax collection, restructuring the tax system, and improving the targeting of expenditures.
format	Publications & Research :: Policy Research Working Paper
author	Goñi, Edwin López, J. Humberto Servén, Luis
author_facet	Goñi, Edwin López, J. Humberto Servén, Luis
author_sort	Goñi, Edwin
title	Fiscal Redistribution and Income Inequality in Latin America
title_short	Fiscal Redistribution and Income Inequality in Latin America
title_full	Fiscal Redistribution and Income Inequality in Latin America
title_fullStr	Fiscal Redistribution and Income Inequality in Latin America
title_full_unstemmed	Fiscal Redistribution and Income Inequality in Latin America
title_sort	fiscal redistribution and income inequality in latin america
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2008/01/8962550/fiscal-redistribution-income-inequality-latin-america http://hdl.handle.net/10986/6468
_version_	1764400205536428032

Fiscal Redistribution and Income Inequality in Latin America

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