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The Equal Sacrifice Principle Revisited

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  • Peter J. Lambert

    (Department of Economics, University of Oregon)

  • Helen T. Naughton

    (Department of Economics, University of Oregon)

Abstract

What does an equal sacrifice tax look like in the case of a rank-dependent social welfare function? One's tax liability evidently becomes a function of one's income and one's position in the distribution in such a case, but not much else appears to be known. (Menahem Yaari touched upon the issue in his paper "A controversial proposal concerning inequality measurement", Journal of Economic Theory 1988, but focused only on a poll tax). In this paper, we determine the properties of the equal sacrifice tax for a wide class of rank-dependent social welfare functions, and integrate the theory with that already available for the class of utilitarian social welfare functions. In an additional step, we analyze the equal sacrifice tax for a class of mixed utilitarian and rank-dependent social welfare functions, and finally we review what this synthesis has achieved.

Suggested Citation

  • Peter J. Lambert & Helen T. Naughton, 2006. "The Equal Sacrifice Principle Revisited," Working Papers 45, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2006-45
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2006-45.pdf
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    Cited by:

    1. Peter J. Lambert & Helen T. Naughton, 2009. "The Equal Absolute Sacrifice Principle Revisited," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 328-349, April.
    2. Peter J. Lambert, 2007. "Positional equity and equal sacrifice: design principles for an EU-wide income tax?," Working Papers 0706, University of Otago, Department of Economics, revised Apr 2007.

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    More about this item

    Keywords

    equal sacrifice; income tax; equity.;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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