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Chart: Income Inequality by Country, Before and After Tax

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Income Inequality by Country, Before and After Tax

Do taxes impact income inequality by country?

This animated chart, from Our World in Data, shows income inequality after taxes across 45 countries—a key measure for examining differences in living standards globally.

Which Tax Systems Offset Income Inequality the Most?

First, income inequality was analyzed by using the Gini coefficient, a common measure for analyzing wealth distribution. The Gini coefficient falls on a scale of 0-100, where a score of 0 indicates equally shared income and a score of 100 implies that one person takes all.

Here’s how each country’s wealth distribution changes as a result of their tax systems, using the most recently available data:

Country YearBefore vs. After Tax %
(Reduction in Gini Coefficient)
🇧🇪 Belgium202049.5%
🇫🇮 Finland202147.3%
🇸🇮 Slovenia202045.5%
🇦🇹 Austria202044.8%
🇮🇪 Ireland202044.5%
🇫🇷 France201943.7%
🇨🇿 Czechia202043.2%
🇸🇰 Slovakia201942.0%
🇩🇪 Germany201940.4%
🇩🇰 Denmark201939.8%
🇵🇱 Poland202038.9%
🇳🇴 Norway202137.9%
🇬🇷 Greece202037.7%
🇮🇹 Italy202037.2%
🇭🇷 Croatia202037.0%
🇵🇹 Portugal202037.0%
🇭🇺 Hungary202036.8%
🇪🇸 Spain202036.1%
🇨🇦 Canada202036.1%
🇪🇪 Estonia202035.1%
🇸🇪 Sweden202135.0%
🇱🇺 Luxembourg202034.4%
🇳🇱 Netherlands202133.6%
🇯🇵 Japan201833.3%
🇷🇴 Romania202033.1%
🇮🇸 Iceland201732.2%
🇱🇹 Lithuania200431.3%
🇬🇧 UK202030.0%
🇳🇿 New Zealand202029.5%
🇱🇹 Lithuania202029.2%
🇨🇦 Canada201928.6%
🇮🇱 Israel202028.3%
🇦🇺 Australia202027.9%
🇱🇻 Latvia202127.6%
🇺🇸 U.S.202127.5%
🇷🇺 Russia201727.0%
🇧🇬 Bulgaria202024.1%
🇨🇭 Switzerland201921.4%
🇰🇷 South Korea202018.3%
🇧🇷 Brazil201617.4%
🇹🇷 Türkiye201917.3%
🇿🇦 South Africa201712.8%
🇨🇷 Costa Rica202111.6%
🇨🇱 Chile20177.1%
🇮🇳 India20112.6%

As the above table shows, Belgium saw the steepest decline in income inequality, dropping by nearly half after-tax. The country’s progressive tax rate system—where taxes increase as a person’s income increases—is one factor behind this decline.

Other Nordic countries like Finland, Slovenia, and Austria, all saw notable decreases.

Income inequality also falls significantly in Ireland, where many big tech giants are incorporated due to its favorable tax policies. In fact, foreign-owned firms, including Apple and Microsoft, make up the majority of its corporate taxes.

However in 2024, the country is implementing a 15% corporate tax rate as part of a new global minimum standard.

Interestingly, in the U.S., income inequality after tax drops by almost 28%, but before-tax inequality is high. In 2019, people in the highest income quintile earned on average 14 times more than the average household. A report from the Congressional Budget Office states that transfers and taxes increased the lowest quintile household incomes by $15,100 on average.

Does Government Spending Impact Inequality?

Studies show that Gini coefficients are linked to a country’s government spending.

In this way, higher government spending contributes to a more equal distribution of income, or a lower Gini coefficient. It further shows that strong education systems increased the effectiveness of redistributive public spending.

Consider how in France, government spending makes up 58% of GDP, and in Belgium it stands at almost 54%. By contrast, it accounts for 37% of GDP in America, which has an after-tax Gini coefficient that exceeds both European countries by a notable difference.

If the U.S. were to increase government spending in efforts to reduce inequality, it would likely mean higher taxes. Given the current political climate, the odds of this appear fairly slim.

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This article was published as a part of Visual Capitalist's Creator Program, which features data-driven visuals from some of our favorite Creators around the world.

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Markets

Mapped: Inflation Projections by Country, in 2024

Global inflation projections look optimistic in 2024, but risks of a second wave of price pressures remain due to geopolitical shocks.

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This map shows inflation projections around the world in 2024.

Inflation Projections, by Country in 2024

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Global economic prospects hang on a delicate balance, largely hinging on the path of inflation.

While inflation looks to be easing, there remains the risk of a second wave of price pressures driven by geopolitical conflicts and supply disruptions in the Red Sea. Adding to this, a stronger than expected labor market could drive consumer demand, pushing up higher prices.

This graphic shows 2024 inflation projections around the world, based on forecasts from the International Monetary Fund (IMF).

 

 

Is Global Inflation On a Downward Path?

In 2024, global inflation is projected to decline to 5.8%, down from a 6.8% estimated annual average in 2023.

Tighter monetary policy and falling energy prices are forecast to dampen price pressures alongside a cooling labor market. Below, we show inflation projections across 190 countries:

CountryProjected Annual Inflation Change 2024
🇻🇪 Venezuela230.0%
🇿🇼 Zimbabwe190.2%
🇸🇩 Sudan127.3%
🇦🇷 Argentina69.5%
🇹🇷 Türkiye54.3%
🇪🇬 Egypt25.9%
🇦🇴 Angola25.6%
🇮🇷 Iran25.0%
🇧🇮 Burundi22.4%
🇸🇱 Sierra Leone21.7%
🇸🇷 Suriname20.0%
🇪🇹 Ethiopia18.5%
🇵🇰 Pakistan17.5%
🇳🇬 Nigeria15.4%
🇲🇼 Malawi15.2%
🇬🇭 Ghana15.0%
🇾🇪 Yemen15.0%
🇲🇳 Mongolia12.8%
🇭🇹 Haiti12.7%
🇺🇿 Uzbekistan10.7%
🇹🇳 Tunisia10.6%
🇹🇲 Turkmenistan10.0%
🇺🇦 Ukraine10.0%
🇲🇬 Madagascar8.6%
🇰🇬 Kyrgyz Republic8.0%
🇿🇲 Zambia7.9%
🇲🇺 Mauritius7.8%
🇬🇳 Guinea7.8%
🇰🇿 Kazakhstan7.5%
🇧🇩 Bangladesh7.2%
🇲🇲 Myanmar7.2%
🇸🇹 São Tomé and Príncipe7.2%
🇬🇲 The Gambia7.1%
🇨🇩 Democratic Republic of the Congo7.1%
🇩🇿 Algeria6.8%
🇹🇯 Tajikistan6.5%
🇳🇵 Nepal6.5%
🇰🇪 Kenya6.5%
🇲🇿 Mozambique6.5%
🇹🇴 Tonga6.2%
🇸🇸 South Sudan6.1%
🇱🇷 Liberia6.0%
🇺🇾 Uruguay5.7%
🇻🇺 Vanuatu5.6%
🇵🇱 Poland5.5%
🇬🇾 Guyana5.5%
🇷🇼 Rwanda5.5%
🇭🇺 Hungary5.4%
🇳🇦 Namibia5.3%
🇬🇶 Equatorial Guinea5.2%
🇧🇹 Bhutan5.1%
🇦🇿 Azerbaijan5.0%
🇯🇲 Jamaica5.0%
🇱🇸 Lesotho5.0%
🇲🇩 Moldova5.0%
🇷🇺 Russia5.0%
🇺🇬 Uganda5.0%
🇳🇮 Nicaragua4.8%
🇵🇬 Papua New Guinea4.7%
🇷🇴 Romania4.7%
🇬🇹 Guatemala4.6%
🇼🇸 Samoa4.5%
🇿🇦 South Africa4.5%
🇸🇰 Slovak Republic4.5%
🇨🇴 Colombia4.5%
🇮🇳 India4.4%
🇧🇼 Botswana4.4%
🇸🇿 Eswatini4.3%
🇱🇻 Latvia4.3%
🇭🇳 Honduras4.2%
🇳🇷 Nauru4.2%
🇧🇪 Belgium4.0%
🇮🇸 Iceland4.0%
🇹🇿 Tanzania4.0%
🇰🇮 Kiribati4.0%
🇲🇷 Mauritania4.0%
🇵🇾 Paraguay4.0%
🇷🇸 Serbia4.0%
🇩🇴 Dominican Republic4.0%
🇦🇲 Armenia4.0%
🇧🇷 Brazil3.9%
🇸🇴 Somalia3.9%
🇹🇻 Tuvalu3.8%
🇧🇴 Bolivia3.8%
🇧🇾 Belarus3.7%
🇨🇲 Cameroon3.7%
🇽🇰 Kosovo3.7%
🇪🇪 Estonia3.6%
🇧🇧 Barbados3.6%
🇸🇧 Solomon Islands3.6%
🇦🇱 Albania3.6%
🇦🇺 Australia3.4%
🇪🇸 Spain3.4%
🇵🇭 Philippines3.4%
🇻🇳 Vietnam3.4%
🇲🇦 Morocco3.3%
🇸🇮 Slovenia3.3%
🇦🇹 Austria3.2%
🇭🇷 Croatia3.2%
🇨🇬 Republic of Congo3.2%
🇳🇴 Norway3.2%
🇸🇬 Singapore3.2%
🇲🇽 Mexico3.2%
🇹🇩 Chad3.1%
🇲🇪 Montenegro3.1%
🇱🇹 Lithuania3.1%
🇨🇷 Costa Rica3.0%
🇰🇭 Cambodia3.0%
🇮🇹 Italy3.0%
🇨🇱 Chile3.0%
🇬🇪 Georgia3.0%
🇬🇼 Guinea-Bissau3.0%
🇮🇶 Iraq3.0%
🇱🇦 Lao P.D.R.3.0%
🇫🇲 Micronesia3.0%
🇩🇲 Dominica2.9%
🇸🇪 Sweden2.8%
🇩🇪 Germany2.8%
🇬🇷 Greece2.7%
🇲🇾 Malaysia2.7%
🇮🇪 Ireland2.6%
🇯🇵 Japan2.6%
🇫🇯 Fiji2.6%
🇲🇭 Marshall Islands2.6%
🇬🇩 Grenada2.6%
🇺🇸 United States2.6%
🇵🇹 Portugal2.6%
🇮🇱 Israel2.6%
🇧🇸 The Bahamas2.6%
🇯🇴 Jordan2.6%
🇱🇾 Libya2.5%
🇳🇿 New Zealand2.5%
🇧🇯 Benin2.5%
🇩🇰 Denmark2.5%
🇩🇯 Djibouti2.5%
🇸🇲 San Marino2.5%
🇹🇱 Timor-Leste2.5%
🇮🇩 Indonesia2.5%
🇦🇬 Antigua and Barbuda2.5%
🇳🇪 Niger2.5%
🇨🇫 Central African Republic2.5%
🇵🇸 West Bank and Gaza2.5%
🇲🇻 Maldives2.4%
🇲🇹 Malta2.4%
🇳🇱 Netherlands2.4%
🇸🇨 Seychelles2.4%
🇬🇧 United Kingdom2.4%
🇬🇦 Gabon2.4%
🇰🇳 St. Kitts and Nevis2.3%
🇭🇰 Hong Kong SAR2.3%
🇲🇰 North Macedonia2.3%
🇦🇪 UAE2.3%
🇹🇹 Trinidad and Tobago2.3%
🇶🇦 Qatar2.3%
🇵🇦 Panama2.2%
🇸🇦 Saudi Arabia2.2%
🇵🇪 Peru2.2%
🇨🇾 Cyprus2.2%
🇨🇿 Czech Republic2.2%
🇹🇬 Togo2.2%
🇧🇬 Bulgaria2.2%
🇦🇼 Aruba2.2%
🇨🇦 Canada2.1%
🇧🇦 Bosnia and Herzegovina2.1%
🇱🇨 St. Lucia2.1%
🇦🇩 Andorra2.0%
🇧🇫 Burkina Faso2.0%
🇨🇻 Cabo Verde2.0%
🇨🇮 Côte d'Ivoire2.0%
🇰🇷 Korea2.0%
🇲🇱 Mali2.0%
🇻🇨 St. Vincent and the Grenadines2.0%
🇨🇭 Switzerland1.9%
🇵🇷 Puerto Rico1.9%
🇨🇳 China1.9%
🇫🇮 Finland1.9%
🇫🇷 France1.9%
🇹🇼 Taiwan1.8%
🇵🇼 Palau1.8%
🇹🇭 Thailand1.8%
🇱🇺 Luxembourg1.7%
🇸🇻 El Salvador1.7%
🇲🇴 Macao SAR1.7%
🇴🇲 Oman1.7%
🇰🇲 Comoros1.6%
🇧🇳 Brunei Darussalam1.5%
🇪🇨 Ecuador1.5%
🇧🇭 Bahrain1.4%
🇧🇿 Belize1.2%
🇸🇳 Senegal0.3%

Venezuela, with the largest oil reserves globally, is projected to see inflation reach 230%—the highest overall.

Across the last decade, the country has faced hyperinflation, reaching a stunning 10 million percent in 2019. Since U.S. sanctions were lifted last year, inflation has fallen dramatically due to sharp cuts in government spending and increasing dollarization of the economy, which is bolstering the bolivar.

In America, slower economic growth coupled with a softening labor market could ease inflation, which is forecast to reach 2.6% in 2024. While the Federal Reserve has signaled that the worst is over, unexpected momentum across the economy could cloud the outcome. As of November 2023, $290 billion in excess savings were held across American households, which may continue to spur consumer demand.

Over in Europe, inflation is anticipated to average 3.3% across advanced economies. Today, sinking natural gas prices and low GDP growth are keeping inflation expectations at bay.

China, the world’s second-largest economy, is contending with falling prices due to property market trouble, which drives about a third of the country’s economic growth. Amid sluggish economic activity, a manufacturing slowdown, and low consumer confidence, inflation is forecast to reach 1.7%.

What Could Cause Inflation to Re-Accelerate?

While inflation shocks driven from the pandemic appear to be over, key risks could drive up inflation:

  • Geopolitical Pressures: Rising shipping costs due to the conflict in the Middle East and Red Sea could continue to escalate and energy prices could increase amid disrupted supply, driving inflation higher.
  • Strong Consumer Demand: Accumulated excess savings could continue to fuel economies, leading central banks to remain hawkish. Persistently high wage growth—which increased about double the pre-pandemic average across advanced nations in 2023—could boost consumption and higher prices.
  • Rising Housing Costs: Shelter makes up about a third of the Consumer Price Index, the biggest component overall. If prices accelerate, it presents key inflationary risks. As of January 2024, U.S. shelter costs increased 6% annually.

So far, the global economy has been resilient. While risk factors remain, inflation projections suggest that the path towards a 2% target is slow, but going in the right direction.

 

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