Personal debt was high, due to the inequality of wealth in the south, which led to lowered taxes and . Public lacked proper funding and there were a lot of people in the south during this time.

Taxes and transfers reduce inequality in disposable income relative to market

income. The effect varies, however, across OECD countries. The redistributive

impact of taxes and transfers depends on the size, mix and the progressivity of each

component. Some countries with a relatively small tax and welfare system

(e.g. Australia) achieve the same redistributive impact as countries characterised

by much higher taxes and transfers (e.g. Germany) because they rely more on

income taxes, which are more progressive than other taxes, and on means-tested

cash transfers. This article provides an assessment of the redistributive effect of the

main taxes and cash transfers, based on various OECD data sources, a set of policy

indicators and a literature review. Using cluster analysis, it also identifies

empirically four groups of countries with tax and transfer systems that share

broadly similar features.

JEL Classification: H2, H23, H53, I3, I38

Keywords: Income inequality, taxes, transfers, welfare systems, redistribution,

progressivity, cluster analysis

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the roman army grew in size and became dominant in the mediterranean region.