Income Distribution in the Context of Capital Accumulation-Tax Structure Relationship: The Turkish Case 1960-2009

Abstract

This study aims to investigate the income distribution in Turkey in the period of 1960-2009. In the study, tax structure is considered along with its accumulative and distributional aspects, beyond its function for public sector financing. A relatively fair tax structure of the 1960-80 period, which is also called the modern tax system, is consistent with the improvement of the income distribution. However, the distribution of income has not worsened despite the post-1980 unfair tax system, which we call "post-modern system of taxation". This can be explained by the new distributive role given to the diminishing state of the neoliberal era. The neoliberal state that embraces advancement of income distribution in the market process focuses on the management of poverty rather than redistribution. The trivial improvement in income distribution in the post-1980 era can be attributed to the "success" in the management of poverty.