Who's the fairest of them all? (tax edition)

Who's the fairest of them all? (tax edition)

There's a fascinating, and perhaps counterintuitive, chart in today's Fiscal Monitor report from the International Monetary Fund. It shows you the extent to which various countries redistribute wealth through their tax systems.

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As you can see, countries towards the left side tend to redistribute more cash through their tax and transfer systems (eg welfare). Or, another way of putting it, the higher the bars, the more the tax system reduces inequality (as measured on the gini coefficient). So on the one end of the spectrum is Denmark, with a famously redistributive tax and benefits system. On the other is Korea, with minimal redistribution.

What's striking for cynical British folks is that far from the UK being towards the Korea end, it is actually far closer to Denmark, sitting inbetween Norway and Finland. The United States, Canada, Germany and France are all significantly less redistributive than them.

The report also contains another counter-intuitive chart which measures the extent to which austerity in a variety of countries has affected inequality.
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According to the IMF's calculations, far from increasing the gap between rich and poor, as some have claimed, the fiscal consolidation measures have actually decreased inequality in Greece, Portugal, the UK and most countries which have implemented austerity programs.

UPDATE: @LEAPeconomics makes the following important point: