Effects of taxes on income distribution injustice in Turkey and solution suggestions

Income inequality and income distribution appear as important concepts in all countries. How the income will be shared, among whom it should be shared, and the justice relationship between shared income and taxes constitute the subject of the thesis. Injustice in income distribution reveals political and social problems. Taxes appear to have a huge share in the solution of these problems. However, while income tax may have a positive effect on income distribution, it is also known that it drags the income bracket by increasing nominal income during inflationary periods. As a result of this determination, a general regulation should be made in income distribution and taxes. This study aims to examine in detail the effects of the tax system in Turkey on income distribution between 2000 and 2022. The analyzes will provide important information for understanding the way tax policies are implemented and their consequences. The focus of the study is to deeply understand the effects of tax policies on income distribution and evaluate whether they fully support social justice. The obtained Fourier ADL cointegration analysis and FMOLS coefficient estimation results show that there is a long-term relationship between economic growth, unemployment, direct and indirect taxes and income distribution. It is seen that economic growth and indirect taxes have a reducing effect on the Gini coefficient, that is, as economic growth or indirect taxes increase, income distribution becomes more equitable. However, it is seen that unemployment and direct taxes have an increasing effect on the Gini coefficient, that is, as unemployment or direct taxes increase, income inequality increases.