# Taxes and transfers funds flowing to and from gov to

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Taxes and transfers: funds flowing to and from gov. To – collection of income and consumption/sales taxes (e.g.VAT) – direct vs. indirect taxes Proportional?? Progressive vs. regressive Tax system in TR relies heavily on indirect taxes: in 2008, 32.7 % of tax revenues come from income taxes while indirect taxes comprise of 63 % (OECD average 42 %). Structure of taxation: share of tax revenues in TR constitutes only 24.5 % of GDP (OECD average: 35.8 %, EU-15: 38.8%) Share of income taxes in GDP (2007) in TR 5.6%

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Distribution: Who gets what and how??? Distribution of Income - share of income received by the population/households Quintiles – equal sized groups Distribution of income in TR Share in national income 1987 1994 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total Household Income 100 100 100 100 100 100 100 100 100 100 100 Lowest 20 % 5,2 4,9 5,29 6 6,04 5,1 5,8 5,8 5,8 5,6 5,8 Second 20 % 9,6 8,6 9,81 10,28 10,69 9,9 10,6 10,6 10,4 10,3 10,6 Third 20 % 14,1 12,6 14,0 2 14,47 15,22 14,8 15,2 15,2 15,2 15,1 15,3 Fourth 20 % 21,2 19 20,8 3 20,93 21,88 21,9 21,5 21,5 21,9 21,5 21,9 Highest 20 % 49,9 54,9 50,0 5 48,32 46,17 48,4 46,9 46,9 46,7 47,6 46,4 Gini coefficient 0,43 0,49 0,44 0,42 0,40 0,43 0,41 0,41 0,41 0,42 0,40
Distribution: Who gets what and how??? Measuring Inequality - need to describe the pattern of inequality - Lorenz Curve The more bended the curve, the greater the inequality of income Gini Coefficient: ratio of area between the Lorenz Curve and diagonal 0 (perfect equality) < Gini < 1 (complete inequality)

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Distribution: Who gets what and how??? Poverty - economic and social deprivation Absolute poverty – whether the std of living is below some fixed level Relative poverty – relative to the rest of the society; considers degree of inequality as well.
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• Fall '11
• boun
• Economics, Gini coefficient, Income inequality metrics, Income distribution, Essential Economic Activities

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