Arbeitspapier

Income inequality, tax base and sovereign spreads

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This paper investigates the association between greater income inequality, de-facto fiscal space, and sovereign spreads. Using data from 50 countries in 2007, in 2009 and in 2011, we find that higher income inequality is associated with a lower tax base, lower de-facto fiscal space, and higher sovereign spreads. The economic magnitude of these effects is rather large: an increase in the Gini coefficient of inequality by 1 (in a scale of 0-100), is associated in 2011 with a lower tax base of 2 percent of the GDP, and with a higher sovereign spread of 45 basis points.

Language
Englisch

Bibliographic citation
Series: Working Paper ; No. 700

Classification
Wirtschaft
Taxation, Subsidies, and Revenue: General
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Open Economy Macroeconomics
Subject
income inequality
tax-base
fiscal space
sovereign spreads
Einkommensverteilung
Soziale Ungleichheit
Steuerbemessung
Öffentlicher Haushalt
Welt

Event
Geistige Schöpfung
(who)
Aizenman, Joshua
Jinjarak, Yothin
Event
Veröffentlichung
(who)
University of California, Economics Department
(where)
Santa Cruz, CA
(when)
2012

Handle
Last update
10.03.2025, 11:41 AM CET

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Object type

  • Arbeitspapier

Associated

  • Aizenman, Joshua
  • Jinjarak, Yothin
  • University of California, Economics Department

Time of origin

  • 2012

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