Inequality reducing properties of progressive income tax schedules: The case of endogenous income

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• dc.contributor.author Carbonell-Nicolau, Oriolca
• dc.contributor.author Llavador, Humbertoca
• dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
• dc.date.accessioned 2018-02-14T15:29:57Z
• dc.date.available 2018-02-14T15:29:57Z
• dc.date.issued 2015-10-01
• dc.date.modified 2018-02-14T15:28:36Z
• dc.description.abstract The case for progressive income taxation is often based on the classic result of Jakobsson (1976) and Fellman (1976), according to which progressive and only progressive income taxes in the sense of increasing average tax rates on income ensure a reduction in income inequality. This result has been criticized on the ground that it ignores the possible disincentive effect of taxation on work effort, and the resolution of this critique has been a long-standing problem in public finance. This paper provides a normative rationale for progressivity that takes into account the effect of an income tax on labor supply. It shows that a tax schedule is inequality reducing only if it is progressive in the sense of increasing marginal tax rates on income, and identifies a necessary and sufficient condition on primitives under which progressive and only progressive taxes are inequality reducing.
• dc.format.mimetype application/pdfca
• dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1492
• dc.identifier.citation Theoretical economics, Vol. 13(1), pag:39-60, 2018
• dc.identifier.uri http://hdl.handle.net/10230/24946
• dc.language.iso eng
• dc.relation.ispartofseries Economics and Business Working Papers Series; 1492
• dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
• dc.subject.keyword progressive taxation; income inequality; incentive effects of taxation.
• dc.subject.keyword Microeconomics
• dc.subject.keyword Labour, Public, Development and Health Economics
• dc.title Inequality reducing properties of progressive income tax schedules: The case of endogenous incomeca
• dc.title.alternative
• dc.type info:eu-repo/semantics/workingPaper