The distributive effects of consumption taxes

Gustafscenen Session 5: Global inequality – levels and trends organized by Ellen Hillbom


Sara Torregrosa-Hetland, Oriol Sabaté


This paper presents estimates of the distributive effects of consumption taxes in five Western countries, during the period 1910 to 1970. With this, it aims to contribute to the debate about the welfare state and regressive taxation, by going back to this formative period. We contrast the patterns in five countries representing the different welfare state models: ‘liberal’ (United Kingdom, United States), ‘conservative’ (France), ‘social democratic’ (Sweden), and ‘southern’ (Spain). Consumption taxes of different kinds (customs, general internal taxes, excises, fiscal monopolies, etc) are obtained from a detailed database (currently under construction). They are then imputed to an income distribution micro-database obtained from previous work (Torregrosa-Hetland and Sabaté, 2021a). The imputations are conducted using the relationship between income and spending in different products, estimated from historical household budget surveys. Distributive effects of consumption taxes are finally combined with those of personal income taxes which we have previously calculated.


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