Inequality and Redistribution in the Netherlands

Arjan Lejour; Arjan Bruil; Celine van Essen; Wouter Leenders; Jan Mohlmann; Simon Rabate

Inequality and Redistribution in the Netherlands

Arjan Lejour, Arjan Bruil, Celine van Essen, Wouter Leenders, Jan Mohlmann, Simon Rabate

Research output: Working paper › Discussion paper › Other research output

Abstract

This paper combines detailed administrative records on the universe of the Dutch population with national accounts aggregates to provide a thorough description of income inequality before and after taxation and government spending. Accounting for domestic and foreign retained earnings has a substantial impact on inequality, raising the top 10% share of pre-tax national income from 29% to 31%. Overall, the tax system is regressive due to high consumption taxes and a low tax burden on capital income. The entire reduction in inequality - the top 10% income share falls to 26% - comes from government spending that is targeted at the bottom of the distribution.

Original language	English
Place of Publication	Den Haag
Publisher	CPB Netherlands Bureau for Economic Policy Analysis
Number of pages	48
Publication status	Published - 25 Mar 2022

Keywords

Inequality
Redistribution
Taxes
transfers
Netherlands

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Cite this

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AU - Bruil, Arjan

AU - van Essen, Celine

AU - Leenders, Wouter

AU - Mohlmann, Jan

AU - Rabate, Simon

PY - 2022/3/25

Y1 - 2022/3/25

N2 - This paper combines detailed administrative records on the universe of the Dutch population with national accounts aggregates to provide a thorough description of income inequality before and after taxation and government spending. Accounting for domestic and foreign retained earnings has a substantial impact on inequality, raising the top 10% share of pre-tax national income from 29% to 31%. Overall, the tax system is regressive due to high consumption taxes and a low tax burden on capital income. The entire reduction in inequality - the top 10% income share falls to 26% - comes from government spending that is targeted at the bottom of the distribution.

AB - This paper combines detailed administrative records on the universe of the Dutch population with national accounts aggregates to provide a thorough description of income inequality before and after taxation and government spending. Accounting for domestic and foreign retained earnings has a substantial impact on inequality, raising the top 10% share of pre-tax national income from 29% to 31%. Overall, the tax system is regressive due to high consumption taxes and a low tax burden on capital income. The entire reduction in inequality - the top 10% income share falls to 26% - comes from government spending that is targeted at the bottom of the distribution.

KW - Inequality

KW - Redistribution

KW - Taxes

KW - transfers

KW - Netherlands

M3 - Discussion paper

BT - Inequality and Redistribution in the Netherlands

PB - CPB Netherlands Bureau for Economic Policy Analysis

CY - Den Haag

ER -

Inequality and Redistribution in the Netherlands

Abstract

Keywords

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