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Income taxation and equity: New dominance criteria and an application to Romania

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  • Paolo Brunori

    (University of Bari, Italy)

  • Flaviana Palmisano

    (University of Luxembourg)

  • Vito Peragine

    (University of Bari, Italy)

Abstract

This paper addresses the problem of the normative evaluation of income tax systems and income tax reforms. While most of the existing criteria, framed in the utilitarian tradition, are uniquely based on information about individual incomes, this paper, building upon the opportunity egalitarian theory, proposes new equity criteria which take into account also the socio-economic characteristics of individuals. Suitable dominance conditions that can be used to rank alternative tax systems are derived by means of an axiomatic approach. Moreover, the theoretical results are used to assess the redistributive effects of an hypothetical tax reform in Romania through a microsimulation analysis.

Suggested Citation

  • Paolo Brunori & Flaviana Palmisano & Vito Peragine, 2014. "Income taxation and equity: New dominance criteria and an application to Romania," Working Papers 348, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2014-348
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2014-348.pdf
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    References listed on IDEAS

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    Cited by:

    1. MUSSARD Stéphane & PI ALPERIN Maria Noel & THIREAU Véronique, 2016. "Aggregable Health Inequality Indices," LISER Working Paper Series 2016-11, Luxembourg Institute of Socio-Economic Research (LISER).
    2. Flaviana Palmisano & Ida Petrillo, 2022. "A general rank‐dependent approach for distributional comparisons," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(2), pages 380-409, April.
    3. Stéphane Mussard & Maria Noel Pi Alperin & Véronique Thireau, 2018. "Health inequality indices and exogenous risk factors: an illustration on Luxembourgish workers," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(9), pages 1285-1301, December.
    4. Flaviana Palmisano & Ida Petrillo, 2021. "A general rank-dependent approach for distributional comparisons," Working Papers 567, ECINEQ, Society for the Study of Economic Inequality.

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    More about this item

    Keywords

    Income inequality; inequality of opportunity; tax reforms; microsimulation; progressivity; horizontal equity.;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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