Using payroll taxes as a redistribution tool
Antoine Bozio
- Fonction : Auteur
- PersonId : 743083
- IdHAL : antoine-bozio
- ORCID : 0000-0003-0201-6148
- IdRef : 129539597
Thomas Breda
- Fonction : Auteur
- PersonId : 181756
- IdHAL : thomas-breda
- ORCID : 0000-0002-6356-7771
- IdRef : 176157824
Résumé
Payroll taxes are usually designed to fund social insurance and not to contribute directly to redistribution. Over the last fifty years, France has modified dramatically the schedule of payroll taxation, turning it into the most progressive part of its tax system. Using administrative data and detailed microsimulation model of labor income taxation, we show that pretax wage (or labor cost) inequality measured by the P90/P10 ratio has increased by 15.4%, while net wage inequality has actually decreased by 18.9% over the 1967–2019 period. This reduction in wage inequality can be largely attributed to the policy mix of reductions of employer payroll taxes for low wage earners joined with minimum wage increases. We discuss whether this unusual French experiment carries lessons for other countries.
Domaines
Economies et financesFormat du dépôt | Fichier |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
Using payroll taxes as a redistribution tool
|
Résumé |
en
Payroll taxes are usually designed to fund social insurance and not to contribute directly to redistribution. Over the last fifty years, France has modified dramatically the schedule of payroll taxation, turning it into the most progressive part of its tax system. Using administrative data and detailed microsimulation model of labor income taxation, we show that pretax wage (or labor cost) inequality measured by the P90/P10 ratio has increased by 15.4%, while net wage inequality has actually decreased by 18.9% over the 1967–2019 period. This reduction in wage inequality can be largely attributed to the policy mix of reductions of employer payroll taxes for low wage earners joined with minimum wage increases. We discuss whether this unusual French experiment carries lessons for other countries.
|
Auteur(s) |
Antoine Bozio
1, 2
, Thomas Breda
1, 2
, Malka Guillot
3
1
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
2
PJSE -
Paris Jourdan Sciences Economiques
( 578027 )
- 48 boulevard Jourdan 75014 Paris
- France
3
HEC Liège
( 322288 )
- Rue Louvrex, 14 - Bât N1 - BE - 4000 Liège
- Belgique
|
Langue du document |
Anglais
|
Nom de la revue |
|
Volume |
226
|
Page/Identifiant |
104986
|
Audience |
Internationale
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Public visé |
Scientifique
|
Date de publication |
2023
|
Mots-clés (JEL) |
|
Domaine(s) |
|
Projet(s) ANR |
|
Mots-clés |
en
Wage inequality, Payroll tax, Redistribution, Social security contributions, Labor cost, Tax incidence
|
DOI | 10.1016/j.jpubeco.2023.104986 |
UT key WOS | 001086708900001 |
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