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13 December 2022

Redistribution Of Income


From this Twitter thread.

The U.S. is more redistributive in its tax system than most other countries, but uses the money it collects to a far smaller extent to redistribute income.

Also relevant is the pre-transfer distribution of income in a country:

Of the 27 countries considered in this paper, the United States thus ranks third in terms of average national income per adult, but nineteenth when it comes to the average income of the poorest 50 percent. On average, pretax income inequality at the bottom is lowest in Northern Europe (with a bottom 50 percent share of 24 percent), followed by Western Europe (21 percent) and Eastern Europe (20 percent). With a bottom 50 percent pretax income share of only 11.7 percent, the United States is by far the most unequal of all countries, followed by a distant Serbia (16 percent) and very far from the values observed in the Czech Republic, Iceland, Norway, and Sweden (all above 25 percent). These differences appeared even more pronounced at the very bottom of the distribution: the average income of the poorest 20 percent was €11,600 in Northern Europe in 2017, more than 3 times larger than its counterpart in the United States (€3,800).

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