Shifting the tax mix towards less-distorting taxes - in particular, from labour to consumption - would improve incentives to work and save, promoting growth. Such reform, however, could raise inequality as consumption taxes tend to be regressive in the short run (given that lower income households bear most of the burden), and are at best neutral in a lifetime perspective. Targeted transfers to low-income households can reduce this likely trade-off (OECD, 2012).