Investigating the effect of inheritance tax on income distribution in Iran: Autoregression with distributional lag (ARDL) approach

Nowadays, income distribution and ways to adjust inequality in income distribution have been considered by many policymakers. The adverse social and economic consequences of increasing income inequality in society are not hidden from anyone, so it has led governments to prioritize improving income distribution. Inequality is defined as the difference between individuals in society in accessing economic resources, and various factors play a role in the unequal distribution of income. Government fiscal policies can certainly be effective in reducing inequality and income redistribution. In most developed countries, government distribution policies are driven by tax policies. In addition to being one of the most important sources of government revenue, tax is one of the most effective tools in improving revenue distribution. The purpose of this study is to investigate the effect of inheritance tax on income distribution during the period of winter 2006 to autumn 2018. According to the results of this study, inheritance tax and economic growth rate in the long term can reduce the Gini coefficient and improve income distribution. Moreover, rising government spending, rising inflation, rising population growth, and long-term unemployment can increase the Gini coefficient and make income distribution more unfair.