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Inequality And How It Is Affected By Redistribution In OECD Countries

Globally, tax and transfer systems play a crucial role in income redistribution and inequality reduction. This figure, made by Vox, shows the inequality (in Gini coefficient) and how it is altered by taxes and transfers. On the left y-axis, we see the Gini coefficient, on the right one the percentage of redistribution (used for the blue square in the figure). For example, this shows that before taxes and transfers (black dash) Ireland has a Gini coefficient of 51, but due to their high redistribution rate (40%!), their Gini after redistribution is 31. In a country like Korea for instance, the difference between Gini before and after redistribution is relatively small, because of the low percentage of redistribution. (source)

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