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A note on progressive taxation and inequality equivalence

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  • Claudio Zoli

    (Department of Economics (University of Verona))

Abstract

We investigate the relationship between the notion of progressive taxation and inequality reduction under a general version of the concept of inequality equivalence. We consider a two parameter formalization of the concept of inequality equivalence that both includes as special cases the intermediate inequality equivalence and the unit-consistent inequality equivalence. Both criteria could range from relative to absolute inequality views as the parameters in the formulation change. For the unit-consistent inequality equivalence the condition of non-decreasing average tax rate is necessary and sufficient to guarantee the post-tax inequality reduction for all the inequality views in between the relative and the absolute.

Suggested Citation

  • Claudio Zoli, 2017. "A note on progressive taxation and inequality equivalence," Working Papers 19/2017, University of Verona, Department of Economics.
    • Handle: RePEc:ver:wpaper:19/2017
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    References listed on IDEAS

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    More about this item

    Keywords

    Progressive taxation; Inequality equivalence; Intermediate measures; Unit consistency;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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