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Positional equity and equal sacrifice: design principles for an EU-wide income tax?

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  • Peter J. Lambert

    (Department of Economics, University of Oregon)

Abstract

Conditions are explored under which a putative EU-wide layer of income tax, additional to the national income taxes of the Member States, would: (a) be horizontally equitable, taking the equals in different EU counties to be those at the same percentile points in the country-specific income distributions, assuming these to differ in logarithms by location and scale only; (b) satisfy an extended equity criterion, that of equal progression among equals; and (c) engender equal sacrifices from the citizens of each country in terms of rank-dependent and utilitarian social evaluation functions. Numerical simulations are undertaken to explore the form that such an EU-wide income tax would take and the properties it would have.

Suggested Citation

  • Peter J. Lambert, 2007. "Positional equity and equal sacrifice: design principles for an EU-wide income tax?," Working Papers 0706, University of Otago, Department of Economics, revised Apr 2007.
    • Handle: RePEc:otg:wpaper:0706
    as

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    File URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0706.pdf
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    References listed on IDEAS

    as
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