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Horizontal Equity and Taxpayer Characteristics: Who Is Advantaged and Disadvantaged by the Federal Income Tax?

Author

Listed:
  • Jane H. Leuthold

    (University of Illinois)

  • Ralph D. Husby

    (University of Illinois)

Abstract

In this paper, household utility levels are estimated indirectly from household labor-supply data to derive before- and after-tax utility indexes. A household is considered advantaged (disadvantaged) by the income tax if its utility index ranking increases (decreases) as a result of the tax. The study finds that tax-advantaged households have, on average, more children and are more likely to own their own homes while tax-disadvantaged households are more likely to be two-earner families. The implications of the findings for the horizontal equity of the income tax are discussed.

Suggested Citation

  • Jane H. Leuthold & Ralph D. Husby, 1989. "Horizontal Equity and Taxpayer Characteristics: Who Is Advantaged and Disadvantaged by the Federal Income Tax?," Eastern Economic Journal, Eastern Economic Association, vol. 15(1), pages 35-44, Jan-Mar.
    • Handle: RePEc:eej:eeconj:v:15:y:1989:i:1:p:35-44
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume15/V15N1P35_44.pdf
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    References listed on IDEAS

    as
    1. Harvey S. Rosen, 1978. "An Approach to the Study of Income, Utility, and Horizontal Equity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 92(2), pages 307-322.
    2. Feldstein, Martin, 1976. "On the theory of tax reform," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 77-104.
    3. Mervyn A. King, 1980. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," NBER Working Papers 0468, National Bureau of Economic Research, Inc.
    4. King, Mervyn A, 1983. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," Econometrica, Econometric Society, vol. 51(1), pages 99-115, January.
    5. Wales, Terence J & Woodland, A D, 1977. "Estimation of the Allocation of Time for Work, Leisure, and Housework," Econometrica, Econometric Society, vol. 45(1), pages 115-132, January.
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    Cited by:

    1. Bönke, Timm & Eichfelder, Sebastian & Utz, Stephen, 2012. "Uneven treatment of family life? Horizontal equity in the U.S. tax and transfer system," Discussion Papers 2012/18, Free University Berlin, School of Business & Economics.

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