The International Monetary Foundation recently published study on “Fiscal policy and income inequality”, according to which the poorest 10% in Greece suffered the most from the austerity measures and reduction of the tax-free threshold from 12,000 to 5,000 euros.
The IMF’s report also notes that the reduction of public sector wages in Greece, Latvia, Portugal, Romania and Spain were significant. In Greece many of the special benefits and bonuses were abolished, mostly affecting those higher up in high-paid civil servants.
Nevertheless, the IMF considers that the measures during the 2008-2012 period were progressive, with the more affluent Greek, Latvian, Portuguese, Romanian and Spanish taxpayers bearing the brunt of the tax raid.
The presentation speech of the IMF’s First Deputy Managing Director David Lipton on the study is available here.
