Tax-Benefit-revealed Redistributive Preferences Over Time: Ireland 1987-2005

By inverting Saez's model of optimal income taxation, we characterize the redistributive preferences of the Irish government between 1987 and 2005. The (marginal) social welfare function revealed by this approach is consistently comparable over time and shows great stability despite profound changes in market incomes and important fiscal reforms over the period. Results are robust to numerous checks regarding data, income concepts, and elasticities. A comparison with the UK shows marked differences reflecting the narrow political spectrum in Ireland compared with radical changes in British politics over the past 30 years. Some ‘anomalies’ in the revealed social welfare function suggest introducing transfers to the working poor.