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This paper focusses on income inequality in Asia, its drivers and policies to combat it. It finds that income inequality has risen in most of Asia, in contrast to many regions. While in the past, rapid growth in Asia has come with equitable distribution of the gains, more recently fast-growing Asian economies have been unable to replicate the “growth with equity” miracle. There is a growing consensus that high levels of inequality can hamper the pace and sustainability of growth. The paper argues that policies could have a substantial effect on reversing the trend of rising inequality. It is imperative to address inequality of opportunities, in particular to broaden access to education, health, and financial services. Also fiscal policy could combat rising inequality, including by expanding and broadening the coverage of social spending, improving tax progressivity, and boosting compliance. Further efforts to promote financial inclusion, while maintaining financial stability, can help.

Labor --- Macroeconomics --- Personal Income, Wealth, and Their Distributions --- Equity, Justice, Inequality, and Other Normative Criteria and Measurement --- Economic Development: Human Resources --- Human Development --- Income Distribution --- Migration --- Aggregate Factor Income Distribution --- Education: General --- Wages, Compensation, and Labor Costs: General --- Education --- Labour --- income economics --- Income inequality --- Income distribution --- Personal income --- Labor share --- National accounts --- Income --- Wages --- India

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This paper aims to contribute to the discussion by sketching ways in which the taxation equity-efficiency frontier could be shifted outward in the Netherlands. In a nutshell, we argue that significant efficiency gains could be achieved by shifting the tax burden away from labor, and toward consumption and capital—especially housing. The detrimental impact of the tax-benefit system on labor supply—in particular by mothers—and the insufficient and distortionary use of the value-added tax (VAT) as a revenue-collection mechanism is also highlighted in the paper. This paper also reviews the main features of the Dutch tax system and sketches the contours of a hypothetical tax reform.

Labor --- Macroeconomics --- Personal Finance -Taxation --- Public Finance --- Taxation --- Nonwage Labor Costs and Benefits --- Private Pensions --- Social Security and Public Pensions --- Labor Demand --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Aggregate Factor Income Distribution --- Pensions --- Labour --- income economics --- Public finance & taxation --- Population & demography --- Pension spending --- Self-employment --- Personal income --- Wages --- Expenditure --- National accounts --- Income tax --- Self-employed --- Income --- Netherlands, The

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This paper provides evidence on the link between financial development and income distribution. Several dimensions of financial development are considered: financial access, efficiency, stability, and liberalization. Each aspect is represented by two indicators: one related to financial institutions, and the other to financial markets. Using a sample of 143 countries from 1961 to 2011, the paper finds that four of the five dimensions of financial development can significantly reduce income inequality and poverty, except financial liberalization, which tends to exacerbate them. Also, banking sector development tends to provide a more significant impact on changing income distribution than stock market development. Together, these findings are consistent with the view that macroeconomic stability and reforms that strengthen creditor rights, contract enforcement, and financial institution regulation are needed to ensure that financial development and liberalization fully support the reduction of poverty and income equality.

Finance: General --- Macroeconomics --- Poverty and Homelessness --- General Financial Markets: General (includes Measurement and Data) --- Financial Institutions and Services: General --- Welfare, Well-Being, and Poverty: General --- Aggregate Factor Income Distribution --- Financial Markets and the Macroeconomy --- Finance --- Poverty & precarity --- Income inequality --- Income distribution --- Financial sector development --- Poverty --- Stock markets --- Financial services industry --- Stock exchanges

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This paper is the first comprehensive empirical study of earnings, income, and consumption inequality in urban China from 1986 to 2009, using unique micro-level data from the Urban Household Survey (UHS). The paper documents a drastic increase in economic inequality for the sample period. The paper finds that consumption inequality closely tracks income inequality, both over time and over the life cycle. The paper believes that the main driver of this co-movement could be a dramatic increase in noninsurable idiosyncratic permanent income shocks after the early 1990s, associated with the economic transition in urban China.

China --- Economic conditions. --- Macroeconomics --- Personal Income, Wealth, and Their Distributions --- Intertemporal Consumer Choice --- Life Cycle Models and Saving --- Macroeconomics: Consumption --- Saving --- Wealth --- Aggregate Factor Income Distribution --- Income inequality --- Consumption --- Income shocks --- Income --- Disposable income --- National accounts --- Income distribution --- Economics --- National income --- China, People's Republic of

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Social Security Contributions (SSC) in Ukraine need urgent attention. If nothing is done, the budget is poised to lose 4.5 percent of GDP in revenues in 2016 due to a legally mandated SSC rate reduction adopted in March 2015. The Ministry of Finance (MoF) is studying a number of options to find a responsible, revenue neutral, approach to lowering SSC rates, which at 40 percent of payroll are above all countries in the OECD. At the same time, Ukraine hosts a very large informal sector which stands as a difficult obstacle to developing its social and economic potential. However, there is no fiscal space to forgo tax revenues. The shift of the tax burden away from labor (as recommended by previous FAD missions) cannot jeopardize the integrity of public finances; it needs compensation from reliable sources of tax revenues. A closely connected issue is the Single Tax System (STS) originally designed for small entrepreneurs, but which has become very porous to others. The regime allows qualifying taxpayers to pay a very low tax on income and a symbolic SSC fee, and offers ample opportunities for avoidance by employers who contract their workers as independent entrepreneurs. To restore horizontal equity with regular employees, the STS requires fundamental reform, addressing: a (turnover) cap for the STS that is too high, a system that effectively overrides the VAT threshold, unnecessarily admits legal persons and offers important tax and SSC incentives for employees to reclassify as independent entrepreneurs – a practice that is currently very difficult to combat due to poor rules and enforcement practices. However, the revenue potential here should not be exaggerated given the difficulty in taxing this segment of the population.

Macroeconomics --- Personal Finance -Taxation --- Public Finance --- Taxation --- Business Taxes and Subsidies --- Aggregate Factor Income Distribution --- Taxation, Subsidies, and Revenue: General --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Public finance & taxation --- Excise taxes --- Excises --- Income --- Revenue administration --- Personal income tax --- Value-added tax --- Excise tax --- Revenue --- Income tax --- Spendings tax --- Ukraine