Date
2011
Dewey
Economie publique
Sujet
Taxation of personal incomes; Inequality; Income distribution; Economics of the Elderly
JEL code
J26; H31; H24; D31
Journal issue
Economics Bulletin
Volume
31
Number
4
Publication date
2011
Article pages
2787-2798
Publisher
Economics Bulletin
Author
Legendre, Bérangère
Type
Article accepté pour publication ou publié
Abstract (EN)
French retirees benefit from specific taxation decreases. These tax exemptions imply considerable public tax expenditures that may be unjustifiable in terms of equity. In this article, we examine the adequacy of tax arrangements for French retirees in the current context of public pension systems reforms. The ratio of retired individuals' income per consumption unit to that of workers was approximately 0.89 in 2003 (0.96 including capital income). Moreover, pensioners' incomes are, on average, 102% of the average income of the population. Inter-cohort inequalities do not seem to justify these tax exemptions. Pensions are more equally distributed than income received from employment, and intra-cohort inequality does not seem to be a more convincing explanation. What is the impact of differential taxation on the inequality between retirees and workers? To answer this question, we propose several empirical models.