The Effects of Taxes and Benefits on Income Distribution in the Enlarged EU

Tax and benefit systems in the enlarged EU vary significantly in size and structure. We examine how taxesand benefits shape income distributions in 19 EU countries, focusing on the differences between WesternEuropean countries (EU15) and Eastern European countries (Estonia, Hungary, Poland, Slovenia). We useEUROMOD, the European tax-benefit microsimulation model, which simulates taxes and benefits forrepresentative samples of household micro-data and through a common framework which allows theanalysis of cross-country differences on a comparable basis. The analysis concentrates on the distributionand composition of incomes, and the effect of taxes and benefits on poverty and inequality