IDEAS home Printed from https://ideas.repec.org/a/kap/itaxpf/v21y2014i4p796-812.html
   My bibliography  Save this article

Rethinking the Pfähler–Lambert decomposition to analyse real-world personal income taxes

Author

Listed:
  • Jorge Onrubia

    ()

  • Fidel Picos-Sánchez

    ()

  • María Carmen Rodado

    ()

Abstract

We provide a generalization and adaptation of the decomposition methodology by Pfähler (Bull Econ Res 42:121–129, 1990 ) and Lambert (The distribution and redistribution of income, 1st edn, 1989 , The distribution and redistribution of income, 3rd edn, 2001 ), designed to assess the redistributive effect of personal income taxation. In particular, we generalize the methodology to several deductions, allowances, schedules or tax credits, making it suitable for real-world complex tax structures, especially dual income taxes. Additionally, we avoid the problem of sequentiality on the measurement of partial redistributive effects and also take into account the re-ranking effects of tax treatments not related to income. Finally we illustrate the utility of the methodology by carrying out an empirical analysis for the 2007 Spanish Personal Income Tax, which meant a shift from a quasi-comprehensive to a semi-dual income tax. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Jorge Onrubia & Fidel Picos-Sánchez & María Carmen Rodado, 2014. "Rethinking the Pfähler–Lambert decomposition to analyse real-world personal income taxes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(4), pages 796-812, August.
  • Handle: RePEc:kap:itaxpf:v:21:y:2014:i:4:p:796-812
    DOI: 10.1007/s10797-014-9316-1
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10797-014-9316-1
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March.
    2. Wagstaff, Adam & van Doorslaer, Eddy & van der Burg, Hattem & Calonge, Samuel & Christiansen, Terkel & Citoni, Guido & Gerdtham, Ulf-G. & Gerfin, Michael & Gross, Lorna & Hakinnen, Unto, 1999. "Redistributive effect, progressivity and differential tax treatment: Personal income taxes in twelve OECD countries," Journal of Public Economics, Elsevier, vol. 72(1), pages 73-98, April.
    3. Verbist, Gerlinde, 2004. "Redistributive effect and progressivity of taxes: an international comparison across the EU using EUROMOD," EUROMOD Working Papers EM5/04, EUROMOD at the Institute for Social and Economic Research.
    4. Keen, Michael & Papapanagos, Harry & Shorrocks, Anthony, 2000. "Tax Reform and Progressivity," Economic Journal, Royal Economic Society, vol. 110(460), pages 50-68, January.
    5. Adam Wagstaff & Eddy van Doorslaer, 2001. "What Makes the Personal Income Tax Progressive? A Comparative Analysis for Fifteen OECD Countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(3), pages 299-316, May.
    6. André Decoster & Isabelle Standaert & Christian Valenduc & Guy Van Camp, 2002. "What makes personal income taxes progressive? The case of Belgium," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 45(3), pages 91-112.
    7. Kakwani, Nanak & Lambert, Peter J., 1998. "On measuring inequity in taxation: a new approach," European Journal of Political Economy, Elsevier, vol. 14(2), pages 369-380, May.
    8. Jorge Onrubia & Fidel Picos & María del Carmen Rodado, 2013. "A Generalization of the Pfähler-Lambert Decomposition," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1301, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    9. Ivica Urban, 2006. "Progressivity of personal income tax in Croatia: decomposition of tax base and rate effects," Financial Theory and Practice, Institute of Public Finance, vol. 30(3), pages 207-231.
    10. Dardanoni, Valentino & Lambert, Peter J., 2002. "Progressivity comparisons," Journal of Public Economics, Elsevier, vol. 86(1), pages 99-122, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stefano Boscolo, 2019. "The Contribution of Proportional Taxes and Tax-Free Cash Benefits to Income Redistribution over the Period 2005-2018: Evidence from Italy," Department of Economics 0152, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    2. Thor O. Thoresen & Zhiyang Jia & Peter J. Lambert, 2016. "Is there More Redistribution Now? A Review of Methods for Evaluating Tax Redistributional Effects," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 72(3), pages 302-333, September.
    3. repec:taf:apeclt:v:23:y:2016:i:8:p:588-591 is not listed on IDEAS
    4. Simone Pellegrino & Achille Vernizzi, 2018. "Decomposing the Redistributive Effect of Taxation to Reveal Axiom Violations," Working papers 049, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    5. Miyazaki, Takeshi & Kitamura, Yukinobu & Ohno, Taro, 2016. "Tax Reforms, Redistribution and Population Aging : Evidence from Japan," Discussion Paper Series 645, Institute of Economic Research, Hitotsubashi University.
    6. repec:fan:epepep:v:html10.3280/ep2017-001002 is not listed on IDEAS

    More about this item

    Keywords

    Decomposition; Personal income tax; Progressivity; Redistribution; D31; H23; H24;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:itaxpf:v:21:y:2014:i:4:p:796-812. 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: (Sonal Shukla) or (Springer Nature Abstracting and Indexing). General contact details of provider: http://www.springer.com .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.