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INCOME REDISTRIBUTION THROUGH THE TAX SYSTEM: A SIMULATION ANALYSIS OF TAX REFORM
Author(s) -
Yagi Tadashi,
Tachibanaki Toshiaki
Publication year - 1998
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1998.tb00289.x
Subject(s) - economics , state income tax , tax reform , gross income , value added tax , indirect tax , redistribution of income and wealth , dividend tax , ad valorem tax , income tax , public economics , labour economics , macroeconomics , unemployment
In this paper, we consider reforming the tax system to a comprehensive income tax model in order to amend the differential treatment of income sources. Our simulation analysis shows that the tax reform improves the effectiveness of the tax system on the redistribution of all sources of income including earned income, financial wealth income, and imputed rent. The analysis of incidence of the tax reform suggests that the tax burden for young renters decreases the most and that for young loan‐free land owners increases the most through this tax reform.