LIFETIME VS ANNUAL TAX-TRANSFER INCIDENCE - HOW MUCH LESS PROGRESSIVE

Annual fiscal incidence studies have found that income taxes and cash transfers are highly progressive and that their net effect is to redis tribute income from rich to poor Yet many argue that such studies over state the redistribution achieved by governments and that lifetime ana lysis is needed New results suggest that both income taxes and cash tr ansfers are progressive on a lifetime basis, although they are much le ss progressive than annual studies suggest. The Australian tax-transfe r system thus generates some lifetime redistribution from rich to poor , while also enforcing intra-personal redistribution across the life c ycle of individuals