Paul Sweeney: The previous blog on the recent OECD paper on taxation pointed out its new recognition that taxation systems are not just about efficiency but must include other principles like equity. The paper sets out trends in inequality and the use of taxes and transfers to reduce it.
The OECD paper takes a tax-by-tax discussion on tax design that supports inclusive growth. It discusses the efficiency and equity implications of each tax and offers options to reconcile both objectives. It argues that, “while a tax-by-tax assessment is critical, the possibility of reconciling efficiency and equity through tax policy will depend on the interaction of many elements within and beyond tax systems.”