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