Horizontal equity, equal progression: an utilitarian approach
We consider an heterogeneous population in which we make a partition into two groups that are homogeneous with respect to the characteristics, other than the income, with fiscal incidence. The differences between both groups are taken into account by means of a profile of utility functions and the fiscal system is constituted by two tax schedules, one for each group. In this context, taking as equal those tax payers with the same level of utility, we define a scale of equivalence and we give several definitions of the horizontal equity principle. We characterize the fiscal systems which satisfy it in terms of utility loss, it allows us the incorporation of the equal sacrifice principle to the analysis. Furthermore, we obtain the conditions under which the equal face the same degree of progression. Finally, we particularize our results to the case of isoelastic utility functions.
Volume (Year): 174 (2005)
Issue (Month): 3 (September)
|Contact details of provider:|| Postal: Avda. Cardenal Herrera Oria, 378, 28035 Madrid|
Web page: http://www.ief.es
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Aronson, J Richard & Johnson, Paul & Lambert, Peter J, 1994. "Redistributive Effects and Unequal Income Tax Treatment," Economic Journal, Royal Economic Society, vol. 104(423), pages 262-70, March.
- Ok, Efe A. & Lambert, Peter J., 1999. "On evaluating social welfare by sequential generalized Lorenz dominance," Economics Letters, Elsevier, vol. 63(1), pages 45-53, April.
- Donaldson, D. & Pendakur, K., 1999. "Equivalent-Income Functions and Income-Dependent Equivalence Scales," Discussion Papers dp99-8, Department of Economics, Simon Fraser University.
- D'Antoni, Massimo, 1999. "Piecewise linear tax functions, progressivity, and the principle of equal sacrifice," Economics Letters, Elsevier, vol. 65(2), pages 191-197, November.
- Jakobsson, Ulf, 1976. "On the measurement of the degree of progression," Journal of Public Economics, Elsevier, vol. 5(1-2), pages 161-168.
- Mervyn A. King, 1980. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," NBER Working Papers 0468, National Bureau of Economic Research, Inc.
- Luis J. Imedio Olmedo & Encarnación M. Parrado Gallardo & Maria Dolores Sarrión Gavilán, 2003. "Códigos impositivos lineales. Su efecto sobre poblaciones heterogéneas," Hacienda Pública Española, IEF, vol. 167(4), pages 57-85, December.
- Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
- Ebert, Udo & Moyes, Patrick, 2000. "Consistent Income Tax Structures When Households Are Heterogeneous," Journal of Economic Theory, Elsevier, vol. 90(1), pages 116-150, January.
- Luis J. Imedio-Olmedo & Encarnación Macarena Parrado-Gallardo & M.Dolores. Sarrión, 1999. "La tarifa del IRPF y el principio de igualdad de sacrificio," Investigaciones Economicas, Fundación SEPI, vol. 23(2), pages 281-299, May.
- Raúl Camarero & Octavio Herrero & Ignacio Zubiri, 1993. "La medición de la inequidad horizontal: teoría y una aplicación al caso de Vizcaya," Investigaciones Economicas, Fundación SEPI, vol. 17(2), pages 333-362, May.
- Feldstein, Martin, 1976. "On the theory of tax reform," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 77-104.
- Juan Gabriel Rodríguez & Rafael Salas & Irene Perrote, 2005.
"Partial Horizontal Inequity Orderings: A Non-parametric Approach,"
Oxford Bulletin of Economics and Statistics,
Department of Economics, University of Oxford, vol. 67(3), pages 347-368, 06.
- Juan Gabriel Rodríguez & Rafael Salas & Irene Perrote, 2004. "Partial Horizontal Inequity Orderings: A non-parametric Approach," Economic Working Papers at Centro de Estudios Andaluces E2004/01, Centro de Estudios Andaluces.
- Shorrocks, Anthony, 2004. "Inequality and Welfare Evaluation of Heterogeneous Income Distributions," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Fellman, J, 1976. "The Effect of Transformations on Lorenz Curves," Econometrica, Econometric Society, vol. 44(4), pages 823-24, July.
- Udo Ebert & Peter J Lambert, .
"Horizontal Equity and Progession when Equivalence Scales are not Constant,"
02/02, Department of Economics, University of York.
- Udo Ebert & Peter J. Lambert, 2004. "Horizontal Equity and Progression When Equivalence Scales Are Not Constant," Public Finance Review, , vol. 32(4), pages 426-440, July.
- Lambert, P & X. Ramos, 1995. "Vertical redistribution and horizontal inequity," IFS Working Papers W95/01, Institute for Fiscal Studies.
- Udo Ebert, 2004. "Social welfare, inequality, and poverty when needs differ," Social Choice and Welfare, Springer, vol. 23(3), pages 415-448, December.
- Udo Ebert, 2000. "Equivalizing Incomes: A Normative Approach," International Tax and Public Finance, Springer, vol. 7(6), pages 619-640, December.
- Jean-Yves Duclos & Peter J. Lambert, 2000. "A normative and statistical approach to measuring classical horizontal inequity," Canadian Journal of Economics, Canadian Economics Association, vol. 33(1), pages 87-113, February.
- Anthony Shorrocks, 2004. "Inequality and welfare evaluation of heterogeneous income distributions," Journal of Economic Inequality, Springer, vol. 2(3), pages 193-218, July.
- Young, H Peyton, 1990. "Progressive Taxation and Equal Sacrifice," American Economic Review, American Economic Association, vol. 80(1), pages 253-66, March.
- King, Mervyn A, 1983. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," Econometrica, Econometric Society, vol. 51(1), pages 99-115, January.
- Plotnick, Robert, 1981. "A Measure of Horizontal Inequity," The Review of Economics and Statistics, MIT Press, vol. 63(2), pages 283-88, May.
- Bourguignon, François, 1993. "Individus, familles et bien-être social," L'Actualité Economique, Société Canadienne de Science Economique, vol. 69(4), pages 243-258, décembre.
When requesting a correction, please mention this item's handle: RePEc:hpe:journl:y:2005:v:174:i:3:p:87-115. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ana Belén Miquel Burgos)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.