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Structural progression measures for dual income tax systems

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  • Arnaldur Kristjánsson
  • Peter Lambert

Abstract

We extend the measurement of structural progression to a pure-form dual income tax (DIT), which combines progressive taxation of labour income with proportional taxation of income from capital at a lower rate. Further, we examine the effect of the DIT’s structural progression on the responsiveness of aggregate revenue to income growth, and we demonstrate how progression measures can aid in redistributive analysis, using Nordic data to highlight problems which can stem from pre-tax distributional changes. We conclude with an assessment of the new theoretical and empirical work that is now called for. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Arnaldur Kristjánsson & Peter Lambert, 2015. "Structural progression measures for dual income tax systems," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(1), pages 1-15, March.
    • Handle: RePEc:kap:jecinq:v:13:y:2015:i:1:p:1-15
    DOI: 10.1007/s10888-014-9287-6
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    More about this item

    Keywords

    Dual income tax; Personal income tax; Structural progression; D31; D63; H23;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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