Individualism and tax progressivity

Figures & data

Figure 1. Individualism index and tax progressivity.

Note: The values of Tax Progressivity and Individualism Index are averaged over the sample period between 1990 and 2005 for each of the 87 countries whose data are utilised for the regression analyses below. Each country is notated according to ISO 3-letter code.

Source: generated by this study.

Figure 2. Pre-tax income inequality and tax progressivity.

Note: The values of Tax Progressivity and Individualism Index are averaged over the sample period between 1990 and 2005 for each of the 87 countries whose data are utilised for the regression analyses below. Each country is notated according to ISO 3-letter code.

Source: generated by this study.

Table 1. Descriptive statistics.

Variable	Mean	(SD)
Tax Progressivity	0.064	(0.020)
Gini Index of Pre-tax Income	46.771	(6.488)
Index of Individualism	42.281	(23.276)
GDP Per Capita (PPP, 2011 international thousand dollars)	18.579	(16.473)
Total Population (million)	65.850	(184.012)
Population Share of Prime-Age Workers (%)	63.166	(5.788)
Involvement in Inter-State War (=1)	0.094	(0.293)
Parliamentary System (=1)	0.519	(0.500)
Legal Origin	Frequency	Share (%)
English Legal Origin	353	29.76
French Legal Origin	552	46.54
German Legal Origin	203	17.12
Scandinavian Legal Origin	78	6.58
OECD Member (=1)	0.370	(0.483)
EU Member (=1)	0.203	(0.402)
Number of Countries	87
Number of Observations	1186

(1) The variables with (=1) are binary indicators that take the value of one if the statement of the variable name is true and the value of zero otherwise.

Source: generated by this study.

Table 2. Effect of individualism on tax progressivity (random effect model).

Dependent Variable: Tax Progressivity	(1)	(2)	(3)	(4)	(5)
Pre-tax Income Inequality	0.0007 (0.0004)	0.0008* (0.0004)		0.0007 (0.0004)	0.0008* (0.0004)
Individualism		$-$0.0005*** (0.0001)	$-$0.0005*** (0.0001)		$-$0.0005*** (0.0001)
GDP per capita	$-$0.00003 (0.0001)	0.0001 (0.0001)	0.00015 (0.0001)	0.00002 (0.0001)	0.00015 (0.0001)
Total Population	$-$0.012 (0.011)	$-$0.012 (0.008)	$-$0.011 (0.007)	$-$0.012 (0.010)	$-$0.012 (0.007)
Population Share of Prime-Age Workers	0.0002 (0.0004)	0.0005 (0.0004)	0.0002 (0.0004)	0.0002 (0.0004)	0.0004 (0.0004)
Involvement in Inter-State War	$-$0.002 (0.003)	$-$0.002 (0.003)	$-$0.002 (0.003)	$-$0.002 (0.003)	$-$0.002 (0.003)
Parliamentary System			$-$0.003 (0.003)	$-$0.005 (0.003)	$-$0.002 (0.003)
Legal Origin			$-$0.001 (0.002)	$-$0.001 (0.002)	0.001 (0.002)
OECD member			0.005 (0.004)	0.002 (0.004)	0.005 (0.004)
EU member			$-$0.003 (0.002)	$-$0.004* (0.002)	$-$0.004* (0.002)
Year Indicators Included?	Yes	Yes	Yes	Yes	Yes
Number of Countries	87	87	87	87	87
Number of Observations	1186	1186	1186	1186	1186

(1) The notations of *, **, and *** refer to being statistically significant at 10%, 5% and 1% levels, respectively.

(2) In the parenthesis is standard errors that are robust to heteroscedasticity and clusters.

Source: generated by this study.

Table 3. Effect of individualism on tax progressivity (population average model).

Dependent Variable: Tax Progressivity	(1)	(2)	(3)	(4)	(5)
Pre-tax Income Inequality	0.001** (0.0005)	0.001* (0.0004)		0.001* (0.0005)	0.0008* (0.0004)
Individualism		$-$0.001*** (0.0001)	$-$0.0005*** (0.0001)		$-$0.0005*** (0.0001)
GDP per capita	0.0001 (0.0002)	0.00015 (0.0001)	0.00015 (0.0001)	0.0001 (0.0002)	0.00016 (0.00014)
Total Population	$-$0.030** (0.015)	$-$0.014 (0.009)	$-$0.010 (0.007)	$-$0.029** (0.014)	$-$0.015* (0.008)
Population Share of Prime-Age Workers	0.0004 (0.0004)	0.0005 (0.0004)	0.0002 (0.0004)	0.0004 (0.0005)	0.0004 (0.0004)
Involvement in Inter-State War	$-$0.002 (0.003)	$-$0.002 (0.003)	$-$0.002 (0.003)	$-$0.002 (0.003)	$-$0.002 (0.003)
Parliamentary System			$-$0.003 (0.003)	$-$0.003 (0.003)	$-$0.002 (0.002)
Legal Origin			$-$0.0009 (0.002)	$-$0.001 (0.002)	0.0006 (0.001)
OECD member			0.005 (0.004)	0.004 (0.004)	0.005 (0.004)
EU member			$-$0.003 (0.002)	$-$0.004* (0.002)	$-$0.0036 (0.002)
Year Indicators Included?	Yes	Yes	Yes	Yes	Yes
Number of Countries	87	87	87	87	87
Number of Observations	1186	1186	1186	1186	1186

(1) The notations of *, **, and *** refer to being statistically significant at 10%, 5% and 1% levels, respectively.

(2) In the parenthesis is standard errors that are robust to heteroscedasticity and clusters.

Source: generated by this study.