Domestic ‘fiscal redistribution’ is taxes or transfers only.

In advanced economies, direct taxes and transfers reduce income inequality, on average, by about one-third. In 2015, the average Gini coefficient for disposable income in these economies was 0.31 compared with 0.49 for market income. Approximately three-quarters of this fiscal redistribution was achieved on the transfer side of the budget (Figure 1.9), with public pension benefits accounting for about half of this (Wang and Caminada 2011).