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Taxation and Poverty

Author

Listed:
  • Christopher P. Chambers

    () (University of California at San Diego)

  • Juan D. Moreno-Ternero

    () (U. Pablo de Olavide y CORE, Université catholique de Louvain)

Abstract

We explore the implications of four natural axioms in taxation: continuity (small changes in the data of a taxation problem should not lead to large changes in the tax allocation), equal treatment of equals (agents with the same pre-tax incomes pay equal taxes), consistency (the way in which a group allocates a tax burden is immune to secessions of taxpayers) and composition down (an increase in the tax burden is handled according to agents' current post-tax incomes). The combination of the four axioms characterizes a large family of rules, which we call generalized equal-sacrifice rules, encompassing the so-called equal-sacrifice rules (such as the flat tax), as well as constrained equal-sacrifice rules (such as the head tax), and exogenous poverty-line rules (such as the leveling tax, and some of its possible compromises with the previous ones).

Suggested Citation

  • Christopher P. Chambers & Juan D. Moreno-Ternero, 2015. "Taxation and Poverty," Working Papers 15.05, Universidad Pablo de Olavide, Department of Economics.
  • Handle: RePEc:pab:wpaper:15.05
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    References listed on IDEAS

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    Cited by:

    1. William Thomson, 2015. "For claims problems, compromising between the proportional and constrained equal awards rules," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 60(3), pages 495-520, November.
    2. René Brink & Juan D. Moreno-Ternero, 2017. "The reverse TAL-family of rules for bankruptcy problems," Annals of Operations Research, Springer, vol. 254(1), pages 449-465, July.
    3. Thomson, William, 2015. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: An update," Mathematical Social Sciences, Elsevier, vol. 74(C), pages 41-59.
    4. Flores-Szwagrzak, Karol, 2015. "Priority classes and weighted constrained equal awards rules for the claims problem," Journal of Economic Theory, Elsevier, vol. 160(C), pages 36-55.
    5. William Thomson, 2015. "For claims problems, another compromise between the proportional and constrained equal awards rules," RCER Working Papers 592, University of Rochester - Center for Economic Research (RCER).

    More about this item

    Keywords

    taxation; poverty; equal sacrifice; consistency; composition.;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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