ABSTRACT
This chapter assesses the ten year (1987-96) impact of taxes and transfers on poverty, income inequality and financial insecurity in the working age populations of the Netherlands, the USA and West Germany. In Esping-Andersen's terms the USA is the prototypical liberal capitalist system and Germany is the clearest case of a conservative, corporatist welfare - capitalist state. Welfare states, and by extension tax-transfer systems are intended to redistribute income both between persons and within person lifetimes, forcing people to save when they are earning for periods when they are not working. The equity goal promoted by within person redistribution is reduction of financial risk, or, one might say, household income instability. The chapter details the components of income measured in the panels. This involves describing measures of pre-government income and post-government income, and next indicating how governmental redistribution of income is calculated.
