Progressivity, Redistribution and Equity, with Application to the British Tax and Benefit System
We propose a general class of indices of horizontal inequity that complements existing classes of progressivity and vertical equity indices. The class of horizontal inequity indices can also correct for biases in measuring a general class of inequality measures. We illustrate our results using the 1985 British tax and benefit system, highlighting the separate contribution of individual taxes and benefits to the overall indices of progressivity, vertical equity, horizontal inequity, and inequality reduction.
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