Fiscal Redistribution is taxes and transfers that take money from the rich and give it to the poor.
Coady and Le 20, IMF Working Paper Fiscal Affairs Department Designing Fiscal Redistribution: The Role of Universal and Targeted Transfers [Prepared by David Coady and Nghia-Piotr Le, David Coady is Lead Social Spending Expert at the Fiscal Affairs Department (FAD) in the IMF. Prior to joining FAD, he was a Research Fellow at the International Food Policy Research Institute and a Lecturer in Economics in the University of London. He earned his Ph.D. in economics from the London School of Economics in 1992. Expert International Monetary Fund BA Berkley MA Georgetown, June 2020, HK]
Although increasing income inequality has been observed in many countries, the varying experiences across countries, with inequality even decreasing in a sizeable share of countries, suggests that public policy and institutions play and important role in determining such outcomes.2 In this respect, fiscal redistribution (i.e., the transfer of income from higher to lower income households via tax and transfer schemes) has a key role to play in addressing income inequality. For instance, evidence from studies of fiscal redistribution shows that over threequarters of the difference in average disposable income inequality between advanced and Latin American countries (with the lowest and highest average disposable income inequality, respectively) is accounted for by differences in the extent of fiscal redistribution rather than by differences in market incomes (Bastagli, Coady and Gupta, 2015)