Taxation, Reranking and Equivalence Scales
AbstractThis paper considers the relationship between equivalence scales and the reranking effects of taxation. The impact on reranking of varying an equivalence scale is divided into two effects. The first, referred to as the direct effect, increases reranking as the equivalence scale used departs from the scale that implicitly underlies the tax system. The second, referred to as the indirect effect, increases reranking as measures of adult equivalent income increase. It is argued that the equivalence scale that underlies a tax system is likely to be in the neighbourhood of the scale that minimises reranking Household data from Australia and the UK are analysed.
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Bibliographic InfoPaper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 782.
Length: 32 pages
Date of creation: 2001
Date of revision:
Note: This paper has now been published in: Creedy, J. and Van de Ven, J. (2005) Taxation, Reranking and Equivalence Scales, Bulletin of Economic Research, 57, no.1, pp. 13-36.
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TAXATION ; TAX SYSTEMS ; INCOME;
Other versions of this item:
- Justin van de Ven & John Creedy, 2003. "Taxation, Reranking and Equivalence Scales," Treasury Working Paper Series 03/11, New Zealand Treasury.
- Justin van de Ven & John Creedy, 2004. "Taxation, Reranking and Equivalence Scales," NIESR Discussion Papers 227, National Institute of Economic and Social Research.
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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