The effects of compliance with the principle of justice in income taxes on income redistribution: An empirical analysis (2005-2020)

This study analyzes the impact of the principle of justice in taxation on income inequality. Emphasizing the redistributive effect of divergent taxation among selected countries, the study investigates whether techniques consistent with the principle of justice in taxation can strengthen or weaken this effect. For this purpose, based on the principles of justice in taxation and income distribution theories, techniques used to achieve payment capacity in a modern sense, compatible with justice, were examined for their effects on redistribution. Findings from analyses conducted using the System GMM method of Dynamic Panel Analysis covering the years 2005-2020 for 37 countries and the years 2009-2020 for 23 EU countries indicate that increasing progressivity on taxes, implementation of Minimum Living Allowance, tax wedge, tax credits and separation theorem have a significant positive effect on tax redistribution. However, personal allowance and setting the first bracket of the tax schedule to "0" did not show a significant effect on tax redistribution.