The Influence of Taxation on Income Inequality: Analysis of the Practice in the EU Countries
Sustainability
; 14(15):9066, 2022.
Article
in English
| ProQuest Central | ID: covidwho-1994153
ABSTRACT
The growing economic inequality around the world is recognized as a global problem of mankind. At the same time, the key tool for reducing inequality and ensuring the achievement of sustainable development goals is the taxation system given its distributive function. That is why this paper puts forward and proves a scientific hypothesis according to which direct taxation has a significant impact on economic inequality, with its scale and sphere depending on the level of economic development and the specific architecture of the tax system adopted in a particular country. The study relies on data from 28 European Union countries, including the United Kingdom, whose tax systems are not identical but harmonized in accordance with European Union directives, the same as the legislation in other economic sectors. Accordingly, it can be concluded that similar institutional characteristics are present. We have used the method of two-stage cluster analysis, which is meant for identifying the natural splitting of the mass of data into groups, then carried out regression analysis and built some models. The contribution of the study is revealing a number of important regularities that are significant for characterizing the dependence of income inequality on direct taxation as well as formulation recommendations for improving the tax policies of European Union countries, with the potential of policy implications. The results obtained can play a significant role in the development and further harmonization of tax systems and resolving the global problem of increased inequality within and between countries.
Environmental Studies; sustainable development; economic inequality; taxation system; direct taxes; cluster analysis; European Union countries; Legislation; Regression analysis; Income inequality; Taxation; Developing countries--LDCs; Generalized method of moments; Influence; Progressive taxes; Globalization; COVID-19; Tax evasion; Income redistribution; Tax rates; Research methodology; Economic sectors; Income; Economic development; Pandemics; Maximum likelihood method; Impact analysis; Socioeconomics; Economic analysis; Coronaviruses; Ordinary differential equations; United States--US
Full text:
Available
Collection:
Databases of international organizations
Database:
ProQuest Central
Language:
English
Journal:
Sustainability
Year:
2022
Document Type:
Article
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