Redistribution from a joint income‑wealth perspective

Redistributive analyses typically use household income as the main reference variable to rank households and to assess their tax liabilities and benefit entitlements. However, the importance of wealth, and the potential redistributive effects of wealth-related taxation, are increasingly recognised. By using data from the Household Finance and Consumption Survey (HFCS) as input data for the tax-benefit microsimulation model EUROMOD, we assess the redistributive effects of taxes and benefits against the joint income-wealth distribution for 16 European OECD countries. This is a new approach that extends indicators developed in the asset-based poverty literature. We study wealth-related taxes alongside other tax-benefit instruments. The analysis allows us to gain insight into which types of policies are redistributive in which institutional settings taking account of the distribution of both income and wealth. This paper extends our pilot study of six countries (Kuypers, Figari, & Verbist, 2019), and updates it to 2017 policies.