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Tax progressivity and tax incidence of the rich and the poor

Author

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  • Li, Chengjian
  • Lin, Shuanglin

Abstract

With the labor supply being flexible, a revenue-neutral increase in the tax progressivity decreases the tax incidence of the rich and increases the tax incidence of the poor if the tax scheme is highly progressive.

Suggested Citation

  • Li, Chengjian & Lin, Shuanglin, 2015. "Tax progressivity and tax incidence of the rich and the poor," Economics Letters, Elsevier, vol. 134(C), pages 148-151.
    • Handle: RePEc:eee:ecolet:v:134:y:2015:i:c:p:148-151
    DOI: 10.1016/j.econlet.2015.07.003
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    References listed on IDEAS

    as
    1. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 28(Jul), pages 2-13.
    2. David Altig, 2001. "Simulating Fundamental Tax Reform in the United States," American Economic Review, American Economic Association, vol. 91(3), pages 574-595, June.
    3. Koyuncu, Murat, 2011. "Can progressive taxation account for cross-country variation in labor supply?," Journal of Economic Dynamics and Control, Elsevier, vol. 35(9), pages 1474-1488, September.
    4. Sarte, Pierre-Daniel G., 1997. "Progressive taxation and income inequality in dynamic competitive equilibrium," Journal of Public Economics, Elsevier, vol. 66(1), pages 145-171, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Labor income tax progressivity; Tax incidence; Overlapping generations model;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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