Size and distributional pattern of pension-related tax expenditures in European countries

International Tax and Public Finance - Tập 27 Số 5 - Trang 1287-1320 - 2020
Barrios, Salvador1, Coda Moscarola, Flavia2, Figari, Francesco2,3,4,5, Gandullia, Luca6
1European Commission, Joint Research Centre, Seville, Spain
2CeRP Collegio Carlo Alberto, Turin, Italy
3Department of Economics, University of Insubria, Varese, Italy
4ISER University of Essex, Colchester, UK
5Dondena University Bocconi, Milan, Italy
6Department of Political Science, University of Genoa, Genoa, Italy

Tóm tắt

This paper quantifies the fiscal and distributional impact of tax expenditures related to public and private contributory pension schemes, affecting both contributions and pension benefits, in all EU Member States using EUROMOD, the EU-wide microsimulation model. Adopting a benchmark system in which pension contributions are exempt and taxes apply when benefits are received (EET system), we find that pension-related tax expenditures can have a sizeable impact on revenue and strong effects on inequality and poverty. Tax expenditures tend to be progressive on two levels: first, among pensioners, by favoring those with lower incomes, mainly as a result of the preferential treatment given to pension incomes; and, second, among people of working age, through a partial or no deduction of pension contributions, draining resources from those at the top of the income distribution. Moreover, embracing a lifetime perspective, tax expenditures tend to redistribute resources in favor of women and low-educated individuals.

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