Analyzing the effectiveness of progressive taxation on income distribution in Iran (March 2003 to February 2024)
Subject Areas : Bi-quarterly Journal of development economics and planningseyed abdollah mousavi 1 , yahya neisi 2 *
1 - Deanship of Technical and Vocational College for Boys No. 2, Ahvaz
2 -
Keywords: Cointegration. Error correction model, Income distribution, Income tax and Progressive structure of tax.,
Abstract :
An efficient tax system in the form of a progressive tax can lead to improved income distribution. Many countries in the world still have progressive income tax systems, which shows that income redistribution through the tax system is a policy goal; The aim of this article is to examine the short-term and long-term effectiveness of progressive tax on income distribution in Iran. In this study, effectiveness of progressive tax on income distribution in Iran in the monthly period from 1382 to 1402 has been examined. Therefore, in order to show the effect of the progressive tax structure on income distribution, a model consisting of the Gini coefficient, the progressive tax system criterion, natural resource rent, the logarithm of GDP per capita, the inflation rate, and the interaction between institutional variables and progressive tax was examined and analyzed using the cointegration method and the error correction model of long-term and short-term relationships. The results of the study show that the income tax structure in Iran is progressive, but it has not been able to improve income distribution. In addition, in the long-term estimate, the negative effect of the interaction between institutional variables and progressive tax, as well as the positive effect of the related criterion of the progressive tax system, GDP per capita, natural resource rent and inflation rate were observed. In addition, in each period, 0.45 of the imbalance of the dependent variable is adjusted and moves towards the long-term relationship.
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