The Redistributive Effects of Social Care Programs and the Income Tax

The article presents the results of a study of the impact that payments from social care funds and income tax collection measures exert on decreasing income inequalities among society members. The analysis is based on statistical data taken from the survey of household budgets for 2000-2002, conducted by the Central Statistical Office.The results of analysis indicate that income differences were decreasing as the effect of both, social care payments and the applied income tax measures. The strength of the redistributive influence of those financial instruments is distinctly different, while social care expenditure were narrowing spreads in incomes by 10.32 %, the taxation generated similar effects on a much smaller scale, namely by 4.33%. Taken together, the composite effect of both instruments on the reduction of income differences amounted to 14.2 %.