We’re a PIC out of fiscal distribution.

Fiscal progressivity is affected by both the progressivity of taxes (lower λT) and transfers (higher λM). Fiscal redistribution requires that transfers are more progressive than taxes, i.e. the social cost of transfers needs to be less than the social benefit of transfers. Figure 4 shows the variation in tax and transfer progressivity across countries. While, on average, taxes reduce fiscal redistribution by around 56 percent (the ratio of the social cost of taxes, λT, to the social cost of transfers, λM), there is very little systematic relationship between the two. In some countries, such as Ireland and Belgium, high transfer progressivity is reinforced by high tax progressivity. In others, such as Hungary and Poland, low transfer progressivity is reinforced by low tax progressivity. In the Netherlands and Belgium, high transfer progressivity is offset by low tax progressivity, whereas in Portugal and Cyprus low transfer progressivity is offset by high tax progressivity.