Equiproportionate Growth of Incomes and After-Tax Inequality
On the one hand, progressive taxation in the sense of an increasing average tax rate is known to cut relative income differentials. On the other hand, equiproportionate additions to incomes generate a more than proportional increase of tax revenue under progressive taxation. The author proves in the paper that increasing residual progression is a necessary and sufficient condition for an equiproportionate growth in all incomes to reduce after tax inequality. Copyright 1989 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research
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Volume (Year): 41 (1989)
Issue (Month): 4 (October)
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