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Distribution Effects of Taxation and Social Spending in Central America

Dear Writer 3684 — Paper no 226891
Could you help please me? I would like to have a one –page outline of my Dissertation Titles:
Distributional Effects of Income Tax in Peru Compared with the Rest of South America
(NB. My dissertation will be a literature review) and must include:
1-Introduction – a description of the problem/issue I am investigating. (In one paragraph)
2- The theoretical framework. I intend to use i.e. the origin of the problem in the literature with at least one key reference.
3- An explanation of the aims and objectives of the dissertation, and the methodology I intend to use (i.e. in my case a literature review)
4- A reference to at last one article that has informed my proposal.
Please accept the attachment which is the outline that I have been working on. This does not fill the requirements as above. Could you please have your reply by five hours’ time?
Thank you.
p.s (single spaced)


Income inequality in South America (SA) has been a significant problem in terms of economic progression warranting the revisions of tax policies and systems in a bid to overcome the problem (4). However, it has been noted that the tax reforms have done little in the alleviation of these inequalities with Peru being the worst hit of all nations. (5), notes that the regressive nature of Peru’s taxation system is because of its Value Added Tax (VAT) and other indirect forms of taxation. Theoretical evidence traces the problem to the late 20th C., with the taxation systems being retrogressive in nature. S A adopted tax reforms initially in the 1960s with the focus being the “expansion of the (VAT), significant cuts in trade tariffs, and the strengthening of tax administration…with these reforms, redistribution became a secondary goal of tax design rather than a primary one,” (5,p.3-4). This strategy only ensured income redistribution equality on a horizontal setting where equity was only achieved in households that shared the same levels of income. Vertical (progressive) equity that ensures an association across various income levels was side-lined during the reforms. Fiscal policies used during this period therefore aimed at achieving higher redistribution revenue levels through enhanced parallel households’ equity that would ensure economic liberalisation. To achieve horizontal equity, the Peruvian government focused on indirect taxes that constitute to the highest revenue avenues. However, personal income taxes as compared to corporate sales taxes achieve a higher redistribution. This has been the root problem of SA as the reliance on indirect taxes has only realised very limited distributional effects as in the long-term period the resource base has diminished considerably (3). Peru has a peculiar trend with regard to its fiscal policy as unlike the other regions of SA, it has combined both its direct and indirect income taxes in its economy only to result into enhanced inequality. My dissertation is a systematic literature review whose objective relates to the theme of the discussion and the methodology to be employed. This will be based on the literature that measures the effects of taxes and income distribution in SA and will offer an in-depth discussion and analysis of the origin of the Peruvian income distributive problem. Additionally, I shall review how this problem relates to its poor fiscal policy management and implementation. I intend to use the resources of the internet and relevant published articles/ journals.
1-Bargain, O., & Tim, C. (2010). Analysing the Effects of Tax-benefit Reforms on Income Distribution: A Decomposition Approach. Journal of Economic Inequality, 8 (1), 1-21.
2-Cubero, R., & Ivanna, V. H. (2010). Equity and Fiscal Policy: The Income Distribution Effects of Taxation and Social Spending in Central America. IMF Working Paper, WP/10/112. Retrieved from www.imf.org/external/pubs/ft/wp/2010/wp10112.pdf
3-Haughton, J. (2005). Tax and Expenditure Incidence in Peru. Retrieved from www.comunidadandina.org/economia/fiscal_Haughton.pdf
4-Jinemez, J. P., Juan, C. G. S., & Andrea, P. (2010). Tax gap and equity in Latin America and the Caribbean. Public Finance and Administrative Reform Studies, 16, 1-44.
5-Mahon, J. (2009). Tax Reforms and Income Distribution in Latin America. Latin America Studies Association. Retrieved from lasa.international.pitt.edu/members/congress…/MahonJames.pdf

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