(University of Oregon, Dept of Economics, 2007-02-06) Lambert, Peter J.; Kim, Kinam, 1970-
In this study we derive measures of the redistributive effect of taxes and welfare expenditures for the U.S.
using CPS data for the years 1994, 1999 and 2004. We find that whilst income inequality increased, the
redistributive effect of taxes and public transfers together reduced market income inequality by
approximately 30 percent. In 2004, 88 percent of the net redistributive effect resulted from public transfers
and 12 percent from taxes. The total redistributive effect would have improved by 35 percent in 2004 if, all
else equal, horizontal inequities in taxes and public transfers could have been eliminated.
