Volume 32, Issue 64 (2025)
J Tax Res 2025, 32(64): 1-41 |
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Salari Esker A, Rahmani T, Souri A. A Review of the Impact of Fiscal Policy (Tax and Government Spending) on Income Distribution and Inequality in Iran. J Tax Res 2025; 32 (64) :1-41
URL: http://taxjournal.ir/article-1-2484-en.html
URL: http://taxjournal.ir/article-1-2484-en.html
1- , salari.abedin@gmail.com
Abstract: (331 Views)
This study examines the redistributive policies of governments, focusing on allocating resources to achieve equitable distribution. It highlights that government expenditures in health care, education, and social services are crucial in income redistribution, particularly benefiting vulnerable populations. Healthcare spending enhances community well-being by providing access to medical services, while educational investments improve knowledge and skills, leading to better job opportunities and income levels. Social services, including insurance and subsidies, further support income distribution. The study also explores the role of taxation in redistributing income from higher-income to lower-income groups.
The research first analyzes budget laws and development programs in Iran concerning redistributive and supportive policies. It then employs a vector error correction model to assess the impact of government spending on health care, education, and social services, alongside taxation, on income distribution from 1966 to 2022. Income distribution is measured with the Gini index. Control variables such as GDP, inflation rate, and real exchange rate are included to account for their contextual effects on income distribution. The findings indicate that increased government spending improves income distribution, while tax policies have no long-term impact. Furthermore, GDP[AN1] growth initially increases inequality before reducing it, and inflation exacerbates income inequality, whereas a rise in the real exchange rate contributes to its reduction. Overall, the results align with established economic theories regarding macroeconomic variables. The findings can create a good understanding for policymakers in the field of redistribution and support matters.
Type of Study: Research |
Subject:
Management
Received: 2025/04/8 | Accepted: 2025/02/28 | Published: 2025/02/28
Received: 2025/04/8 | Accepted: 2025/02/28 | Published: 2025/02/28
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