The impact of tax types on income distribution

The various impacts of levying taxes on income, wealth, and goods and services, which are among the most significant tools of fiscal policy, have diverse effects. Taxation has decisive effects on income distribution, which is crucial for macroeconomic objectives. This study aims to analyze how different types of taxes affect income distribution. In this context, panel data analysis covering the years 2003-2019 and a selected group of 38 countries was conducted to measure the impact of taxes levied on income, wealth, and expenditures on income distribution. As a result, it was found that taxes on expenditures worsen income distribution, while taxes on income and wealth improve income distribution in the selected countries. For Turkey, the analysis covering the years 2014-2020 consists of two stages: the first stage (Level 1) did not yield significant results, whereas the second stage (Level 2) produced results consistent with the theory using the model constructed with the selected group of countries. It was observed that taxes on expenditures worsen income distribution, while taxes on income and wealth improve income distribution.