Who Finances the Welfare State?

According to the WIFO redistribution study, in Austria, the average balance between public benefits received and taxes paid is only negative in the top two tenths of the primary income distribution. In 2019, 37 percent of the population were net contributors, 2 percent of whom were in the second and 22 percent in the top tenth of the distribution. The concentration of net payers in the top tenth results from the high concentration of market incomes. It is important to note in interpreting these results that the balance does not capture all public benefits and taxes and that it originates from a complex interplay of horizontal, intertemporal, and vertical redistribution. Over the years analysed – 2005, 2010, 2015, and 2019 –, the proportion of net contributors and the ratio of the balance to market income remained largely stable.