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A New measurement of Tax Progressivity

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There have been some studies on the measurement of tax progressivity since the innovative works of Suits (1977) and Kakwani (1977). These measurements essentially rely on the idea of the Lorenz distribution of income and tax burden and the Gini concentration of inequality. Instead of such a traditional idea, this paper proposes a new measure of tax progressivity based on the relative volatility of tax revenue vis-a-vis income. The advantage of our approach is to make it possible to assess the degree of tax progressivity and to do international comparisons without any specific information about the distribution of the income and tax burden. All we need is macro data, which is a lot easier to obtain than micro data. This paper also discusses some international comparisons using the new measurement.

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  • Makoto Kakinaka & Rodrigo M. Pereira, 2006. "A New measurement of Tax Progressivity," Working Papers EMS_2006_09, Research Institute, International University of Japan.
    • Handle: RePEc:iuj:wpaper:ems_2006_09
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    File URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2006_09.pdf
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    1. Hayes, Kathy J. & Lambert, Peter J. & Slottje, Daniel J., 1995. "Evaluating effective income tax progression," Journal of Public Economics, Elsevier, vol. 56(3), pages 461-474, March.
    2. Charles T. Carlstrom & David Altig, 1999. "Marginal Tax Rates and Income Inequality in a Life-Cycle Model," American Economic Review, American Economic Association, vol. 89(5), pages 1197-1215, December.
    3. Slemrod,Joel, 1997. "Tax Progressivity and Income Inequality," Cambridge Books, Cambridge University Press, number 9780521587761.
    4. Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March.
    5. Li Wenli & Pierre -Daniel Sarte, 2004. "Progressive Taxation and Long-Run Growth," American Economic Review, American Economic Association, vol. 94(5), pages 1705-1716, December.
    6. Sarte, Pierre-Daniel G., 1997. "Progressive taxation and income inequality in dynamic competitive equilibrium," Journal of Public Economics, Elsevier, vol. 66(1), pages 145-171, October.
    7. Richard E. Slitor, 1948. "The Measurement of Progressivity and Built-In Flexibility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 62(2), pages 309-313.
    8. Suits, Daniel B, 1977. "Measurement of Tax Progressivity," American Economic Review, American Economic Association, vol. 67(4), pages 747-752, September.
    9. Stroup, Michael D., 2005. "An index for measuring tax progressivity," Economics Letters, Elsevier, vol. 86(2), pages 205-213, February.
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    1. Rieth, Malte & Checherita-Westphal, Cristina & Attinasi, Maria-Grazia, 2016. "Personal income tax progressivity and output volatility: Evidence from OECD countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 49(3), pages 968-996.
    2. Magda WISNIEWSKA-KUZMA, 2020. "Measurement of personal income tax progressivity in the post-socialist countries of Europe compared to other OECD countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 11, pages 113-131, December.
    3. Florije Govori, 2019. "Personal Income Tax Progression in Kosovo," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 8, November.
    4. Petr David, 2019. "Optimization of Gini Coefficient Affected by Imperfect Input Data," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 5(1), pages 21-29.

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