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The Equal Absolute Sacrifice Principle Revisited

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  • Peter J. Lambert
  • Helen T. Naughton

Abstract

We summarize the literature on equal absolute sacrifice income taxes, and make some extensions. We adapt the utilitarian equal sacrifice criterion to a wide class of rank‐dependent social welfare functions, and find that liabilities depend on both income and position in the distribution. We investigate whether such taxes need be progressive, using a combination of analytics and simulation, and in the process uncover tax functions not previously recognized as equating sacrifices. Finally, out of horizontal equity considerations a new concept of ‘the equal treatment of equals’ by an income tax emerges, with implications for future work whose significance is discussed.

Suggested Citation

  • Peter J. Lambert & Helen T. Naughton, 2009. "The Equal Absolute Sacrifice Principle Revisited," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 328-349, April.
    • Handle: RePEc:bla:jecsur:v:23:y:2009:i:2:p:328-349
    DOI: 10.1111/j.1467-6419.2008.00564.x
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