Structural Progression Measures for Dual Income Tax Systems
AbstractThe structural progression of an income tax schedule measures how liabilities change with changes in the income being taxed. This paper extends the measurement of structural progression to a pure-form dual income tax (DIT) system, which combines progressive taxation of labour income with proportional taxation of income from capital at a lower rate. Firm links are obtained between structural progression and revenue responsiveness for a DIT, and we demonstrate how structural progression measures can aid in redistributive analysis, using Nordic data to highlight problems which can stem from pretax distributional changes. We conclude with an assessment of the new theoretical and empirical work that is now required, much of which will be data driven.
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Bibliographic InfoPaper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 269.
Length: 17 pages
Date of creation: Oct 2012
Date of revision:
personal income tax; dual income tax; structural progression.;
Find related papers by 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
This paper has been announced in the following NEP Reports:
- NEP-ACC-2012-11-17 (Accounting & Auditing)
- NEP-ALL-2012-11-17 (All new papers)
- NEP-PBE-2012-11-17 (Public Economics)
- NEP-PUB-2012-11-17 (Public Finance)
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