Le rouge, le noir, et l'inégalité: Tax policy and inequality in the European Union
James M. Chen
Nika Šimurina- 1Michigan State University, United States
- 2University of Zagreb, Croatia
This article analyzes the impact of tax policy on income inequality in the European Union (EU). Each EU member-state has adopted a distinct set of fiscal policies. Although most member-states have coordinated their tax systems to promote economic growth, EU countries hold politically divergent views about income inequality and the power of taxation to redress inequality. This research applies linear regression methods incorporating regularization as well as fixed and random effects. Stacking generalization produces a composite model that dramatically improves predictive accuracy while aggregating causal inferences from simpler models. Social contributions, income taxes, and consumption taxes ameliorate inequality. Government spending, however, exacerbates inequality.
Keywords: Income inequality, Tax policy, European Union, Fixed Effects, random effects, stacking generalization
Received: 25 Aug 2023;
Accepted: 27 Nov 2023.
Copyright: © 2023 Chen, Šimurina and Solenički. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Prof. James M. Chen, Michigan State University, East Lansing, United States