AUTHOR=Chen James Ming , Šimurina Nika , Solenički Martina TITLE=Le rouge, le noir, et l'inégalité: tax policy and inequality in the European Union JOURNAL=Frontiers in Applied Mathematics and Statistics VOLUME=9 YEAR=2024 URL=https://www.frontiersin.org/journals/applied-mathematics-and-statistics/articles/10.3389/fams.2023.1282975 DOI=10.3389/fams.2023.1282975 ISSN=2297-4687 ABSTRACT=

This article analyzes the impact of tax policy on income inequality in the European Union (EU). Each EU member-state has adopted a distinct set of fiscal policies. Although most member-states have coordinated their tax systems to promote economic growth, EU countries hold politically divergent views about income inequality and the power of taxation to redress inequality. This research applies linear regression methods incorporating regularization as well as fixed and random effects. Stacking generalization produces a composite model that dramatically improves predictive accuracy while aggregating causal inferences from simpler models. Social contributions, income taxes, and consumption taxes ameliorate inequality. Government spending, however, exacerbates inequality.