Publication:

Did democracy bring redistribution? Insights from the Spanish tax system, 1960-90

The relationship between democracy, inequality, and redistribution has inspired extensive research, but consensus is still elusive. In order to contribute to this discussion, the author analyzes the Spanish case, where transition to democracy was accompanied by a comprehensive tax reform, aiming at increasing progressivity and revenue. But how effectively did it change the distribution of the tax burden? Was there a “fiscal revolution”? The results show that persistent regressivity (albeit decreasing) exacerbated income inequality, failing to attain convergence with more developed countries. The joint effect of the fiscal system, however, was slightly positive due to progressive social spending.