On the equivalence between progressive taxation and inequality reduction
We establish the precise connections between progressive taxation and inequality reduction, in a setting where the level of tax revenue to be raised is endogenously fixed and tax schemes are balanced. We show that, in contrast with the traditional literature on taxation, the equivalence between inequality reduction and the combination of progressivity and income order preservation does not always hold in this setting. However, we show that, among rules satisfying consistency and, either revenue continuity, or revenue monotonicity, the equivalence remains intact.
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| Date of creation: | 01 Jan 2007 |
| Handle: | RePEc:cor:louvco:2007002 |
| Contact details of provider: | Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium) Phone: 32(10)474321 Fax: +32 10474304 Web page: http://www.uclouvain.be/core Email: More information through EDIRC
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- Moulin, Herve, 2002.
"Axiomatic cost and surplus sharing,"
Handbook of Social Choice and Welfare,in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 6, pages 289-357
Elsevier.
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- Thon, Dominique, 1987. "Redistributive properties of progressive taxation," Mathematical Social Sciences, Elsevier, vol. 14(2), pages 185-191, October.
- Jakobsson, Ulf, 1976. "On the measurement of the degree of progression," Journal of Public Economics, Elsevier, vol. 5(1-2), pages 161-168.
- Eichhorn, Wolfgang & Funke, Helmut & Richter, Wolfram F., 1984. "Tax progression and inequality of income distribution," Journal of Mathematical Economics, Elsevier, vol. 13(2), pages 127-131, October. Full references (including those not matched with items on IDEAS)
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