IDEAS home Printed from https://ideas.repec.org/p/ore/uoecwp/2006-4.html
   My bibliography  Save this paper

The Equal Sacrifice Principle Revisited

Author

Listed:
  • Peter J. Lambert

    (University of Oregon Economics Department)

  • Helen T. Naughton

    (University of Oregon Economics (Student))

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," University of Oregon Economics Department Working Papers 2006-4, University of Oregon Economics Department, revised 01 Jun 2006.
    • Handle: RePEc:ore:uoecwp:2006-4
    as

    Download full text from publisher

    File URL: http://economics.uoregon.edu/papers/UO-2006-4_Lambert_Sacrifice.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mitra, Tapan & Ok, Efe A, 1996. "Personal Income Taxation and the Principle of Equal Sacrifice Revisited," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 925-948, November.
    2. Young, H Peyton, 1990. "Progressive Taxation and Equal Sacrifice," American Economic Review, American Economic Association, vol. 80(1), pages 253-266, March.
    3. Donaldson, David & Weymark, John A., 1983. "Ethically flexible gini indices for income distributions in the continuum," Journal of Economic Theory, Elsevier, vol. 29(2), pages 353-358, April.
    4. Ok, Efe A., 1995. "On the principle of equal sacrifice in income taxation," Journal of Public Economics, Elsevier, vol. 58(3), pages 453-467, November.
    5. Weymark, John A., 1981. "Generalized gini inequality indices," Mathematical Social Sciences, Elsevier, vol. 1(4), pages 409-430, August.
    6. Mehran, Farhad, 1976. "Linear Measures of Income Inequality," Econometrica, Econometric Society, vol. 44(4), pages 805-809, July.
    7. Abdelkrim Araar & Jean-Yves Duclos, 2005. "An Atkinson-Gini Family of Social Evaluation Functions: Theory and Illustration Using Data from the Luxembourg Income Study," LIS Working papers 416, LIS Cross-National Data Center in Luxembourg.
    8. Berrebi, Z. M. & Silber, Jacques, 1981. "Weighting income ranks and levels : A Multiple-Parameter Generalization For Absolute and Relative Inequality Indices," Economics Letters, Elsevier, vol. 7(4), pages 391-397.
    9. Hutton, J P & Lambert, P J, 1980. "Evaluating Income Tax Revenue Elasticities," Economic Journal, Royal Economic Society, vol. 90(363), pages 901-906, December.
    10. Moyes, Patrick, 2003. "Redistributive effects of minimal equal sacrifice taxation," Journal of Economic Theory, Elsevier, vol. 108(1), pages 111-140, January.
    11. Berliant, Marcus & Gouveia, Miguel, 1993. "Equal sacrifice and incentive compatible income taxation," Journal of Public Economics, Elsevier, vol. 51(2), pages 219-240, June.
    12. Yaari, Menahem E., 1988. "A controversial proposal concerning inequality measurement," Journal of Economic Theory, Elsevier, vol. 44(2), pages 381-397, April.
    13. Mitra, Tapan & Ok, Efe A., 1997. "On the Equitability of Progressive Taxation," Journal of Economic Theory, Elsevier, vol. 73(2), pages 316-334, April.
    14. Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February.
    15. Gouveia, Miguel & Strauss, Robert P., 1994. "Effective Federal Individual Tax Functions: An Exploratory Empirical Analysis," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(2), pages 317-339, June.
    16. Arnold Jacob Cohen Stuart, 1958. "On Progressive Taxation," International Economic Association Series, in: Richard A. Musgrave & Alan T. Peacock (ed.), Classics in the Theory of Public Finance, pages 48-71, Palgrave Macmillan.
    17. Young, H. P., 1988. "Distributive justice in taxation," Journal of Economic Theory, Elsevier, vol. 44(2), pages 321-335, April.
    18. Young, H. P., 1987. "Progressive taxation and the equal sacrifice principle," Journal of Public Economics, Elsevier, vol. 32(2), pages 203-214, March.
    19. Shorrocks, Anthony F, 1983. "Ranking Income Distributions," Economica, London School of Economics and Political Science, vol. 50(197), pages 3-17, February.
    20. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
    21. Yitzhaki, Shlomo, 1983. "On an Extension of the Gini Inequality Index," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(3), pages 617-628, October.
    22. Gouveia, Miguel & Strauss, Robert P., 1994. "Effective Federal Individual Tax Functions: An Exploratory Empirical Analysis," National Tax Journal, National Tax Association, vol. 47(2), pages 317-39, June.
    23. D'Antoni, Massimo, 1999. "Piecewise linear tax functions, progressivity, and the principle of equal sacrifice," Economics Letters, Elsevier, vol. 65(2), pages 191-197, November.
    24. Francis Ysidro Edgeworth, 1958. "The Pure Theory of Taxation," International Economic Association Series, in: Richard A. Musgrave & Alan T. Peacock (ed.), Classics in the Theory of Public Finance, pages 119-136, Palgrave Macmillan.
    25. Alan Harrison, 1981. "Earnings by Size: A Tale of Two Distributions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 48(4), pages 621-631.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    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. Mitra, Tapan & Ok, Efe A., 1997. "On the Equitability of Progressive Taxation," Journal of Economic Theory, Elsevier, vol. 73(2), pages 316-334, April.
    3. Weinzierl, Matthew, 2014. "The promise of positive optimal taxation: normative diversity and a role for equal sacrifice," Journal of Public Economics, Elsevier, vol. 118(C), pages 128-142.
    4. Satya R. Chakravarty & Palash Sarkar, 2022. "Inequality minimising subsidy and taxation," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 10(1), pages 53-67, May.
    5. Moyes, Patrick, 2003. "Redistributive effects of minimal equal sacrifice taxation," Journal of Economic Theory, Elsevier, vol. 108(1), pages 111-140, January.
    6. Satya Chakravarty, 2007. "A deprivation-based axiomatic characterization of the absolute Bonferroni index of inequality," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(3), pages 339-351, December.
    7. da Costa, Carlos E. & Pereira, Thiago, 2014. "On the efficiency of equal sacrifice income tax schedules," European Economic Review, Elsevier, vol. 70(C), pages 399-418.
    8. Rolf Aaberge, 2009. "Ranking intersecting Lorenz curves," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(2), pages 235-259, August.
    9. Claudio Zoli, 2002. "Inverse stochastic dominance, inequality measurement and Gini indices," Journal of Economics, Springer, vol. 77(1), pages 119-161, December.
    10. Tymon Słoczyński, 2012. "Zastosowanie zasady równych ofiar do oceny sprawiedliwości taryfy podatku dochodowego od osób fizycznych (PIT) w Polsce," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 10, pages 23-47.
    11. Fabio Maccheroni & Pietro Muliere & Claudio Zoli, 2005. "Inverse stochastic orders and generalized Gini functionals," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 529-559.
    12. Rolf Aaberge & Magne Mogstad, 2011. "Robust inequality comparisons," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(3), pages 353-371, September.
    13. repec:ebl:ecbull:v:3:y:2003:i:19:p:1-16 is not listed on IDEAS
    14. Lambert, Peter J. & Millimet, Daniel L. & Slottje, Daniel, 2003. "Inequality aversion and the natural rate of subjective inequality," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1061-1090, May.
    15. D'Antoni, Massimo, 1999. "Piecewise linear tax functions, progressivity, and the principle of equal sacrifice," Economics Letters, Elsevier, vol. 65(2), pages 191-197, November.
    16. Jean-Yves Duclos & Abdelkrim Araar, 2003. "An Atkinson-Gini family of social evaluation functions," Economics Bulletin, AccessEcon, vol. 3(19), pages 1-16.
    17. Thibault Gajdos & Bertrand Lhommeau, 2000. "L'attitude à l'égard des inégalités en France à la lumière du système de prélèvements socio-fiscal," Économie et Prévision, Programme National Persée, vol. 142(1), pages 47-65.
    18. Rolf Aaberge, 2003. "Mean-Spread-Preserving Transformations," Discussion Papers 360, Statistics Norway, Research Department.
    19. Duclos, Jean-Yves & Jalbert, Vincent & Araar, Abdelkrim, 2000. "Classical Horizontal Inequity and Reranking: an Integrated Approach," Cahiers de recherche 0002, Université Laval - Département d'économique.
    20. Tarroux, Benoît, 2019. "The value of tax progressivity: Evidence from survey experiments," Journal of Public Economics, Elsevier, vol. 179(C).
    21. Rolf Aaberge & Magne Mogstad, 2009. "On the Measurement of Long-Term Income Inequality and Income Mobility," ICER Working Papers 09-2009, ICER - International Centre for Economic Research.

    More about this item

    Keywords

    equal sacrifice; income tax; inequality;
    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ore:uoecwp:2006-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bill Harbaugh (email available below). General contact details of provider: https://edirc.repec.org/data/deuorus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.