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 allEUMember States usingEUROMOD,theEU-wide microsimulationmodel. Adopting a benchmark system inwhich 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.
BARRIOS Salvador;
MOSCAROLA Flavia Coda;
FIGARI Francesco;
GANDULLIA Luca;
2020-09-09
SPRINGER
JRC118532
0927-5940 (online),
https://link.springer.com/article/10.1007/s10797-019-09580-7,
https://publications.jrc.ec.europa.eu/repository/handle/JRC118532,
10.1007/s10797-019-09580-7 (online),
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