1. ITD Global Conference - Tax and Inequality
Social Cohesion in a Shifting World - Launch
Intergenerational Aspects
of Inequality
Mario Pezzini
OECD Development Centre
New Dehli, India, 7-9 December 2011
International Tax Dialogue and Ministry of
Finance, Government of India
2. The aspirations of the emerging middle class
Billion OECD countries non-OECD economies
6
5
4
3 80%
68%
2
46% 50%
30%
1
70% 54% 50% 32% 20%
0
2000 2010 2012 2020 2030
Source: PGD 2012 , based on Kharas (2010)
4. Duality and the emerging middle class (Brazil)
The ‘missing middle’ in social protection coverage: informal middle class workers
Population by income quintile and labour status (2006)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1 2 3 4 5
Out of labour force Unemployed Informal employee
Self-employed Skilled self-employed Formal employee
Source: da Costa et al (2011).
5. Policies can make a difference for inequality
Gini coefficients before and after taxes and transfers in developing countries
Inequality before taxes and transfers Inequality after taxes and transfers
60
50
40
30
20
10
0
Mexico
Brazil
OECD-24 avg.
Peru
Chile
Argentina
Colombia
Source: OECD (2008a and 2008b).
6. Burundi
Guinea-Bissau
Congo Dem. Rep.
Sierra Leone
Ethiopia
Niger
Central Afr. Rep.
Malawi*
Liberia
Madagascar
Rwanda
Mozambique
Uganda
Guinea
Tanzania
Burkina Faso
Togo
Gambia
Mali
Comoros**
Ghana**
ODA per capita
Benin
AFRICAN MEDIAN
São Tomé & Principe
Côte d'Ivoire
Mauritania
Tax revenue per capita
Kenya
Source: OECD/AfDB/UNECA (2010), African Economic Outlook.
Cameroon
Senegal
Zambia
Djibouti
Chad
Sudan
Lesotho
Egypt
Nigeria
AFRICAN AVERAGE
Morocco
Resources for development in Africa
Cape Verde
Tunisia
Swaziland
Namibia
Mauritius
Congo
South Africa
Botswana
Angola
Algeria
Gabon
Seychelles
Equatorial Guinea
Libya
0
400
800
1200
1600
2000
USD
7. With higher trust, tax evasion is less acceptable…
0.5
0.4
0.3
Tax evasion is never justifiable
0.2
(fraction of respondents)
0.1
0.0
-0.1
-0.2
-0.3
-0.4
-0.5
-0.3 -0.2 -0.1 0.1 0.2 0.3
Interpersonnal trust indicator
Source: PGD 2012.
8. ITD Global Conference - Tax and Inequality
Social Cohesion in a Shifting World - Launch
The floor is yours
New Dehli, India, 7-9 December 2011
International Tax Dialogue and Ministry of
Finance, Government of India