Table 6 Channelling redistribution via the budget versus via the pension system
From: Political economy of pension reforms: selected general issues and the Polish pension reform case
Via the budget | Via the pension system | |
|---|---|---|
Redistribution base | Larger | Smaller |
Who pays (1) | Generally taxes are usually progressive – so the rich pay more | Pension contributions are linear – no progression |
Who pays (2) | Labour and capital | Labour |
Adjustability to changing needs | Relatively easy – each year | Rigid – long term liabilities |