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Income Distribution, Tax Structure, and the Measurement of Tax Progressivity

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  • Jacques Silber

    (Bar-Ilan University)

Abstract

A new discrete formulation of the most commonly used tax progressivity indexes is suggested. This approach allows one to rigorously prove that in some cases the Dalton/Musgrave-Thin and the Kakwani/Suits indexes may rank tax systems differ ently. Moreover, it enables one, when comparing tax progressivity in two countries (or over time) to precisely determine which part of the gap between the indexes is due to differences in pretax incomes, in (standardized) tax rates, and eventually also in the average tax burden. An illustration based on U.S. and Canadian data for the year 1985 confirms the empirical relevance of this formulation of the tax progressivity indexes.

Suggested Citation

  • Jacques Silber, 1994. "Income Distribution, Tax Structure, and the Measurement of Tax Progressivity," Public Finance Review, , vol. 22(1), pages 86-102, January.
    • Handle: RePEc:sae:pubfin:v:22:y:1994:i:1:p:86-102
    DOI: 10.1177/109114219402200105
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    References listed on IDEAS

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    Cited by:

    1. Koen Caminada & Chen Wang, 2011. "Disentangling Income Inequality and the Redistributive Effect of Social Transfers and Taxes in 36 LIS Countries," LIS Working papers 567, LIS Cross-National Data Center in Luxembourg.
    2. Olivier Bargain & Tim Callan, 2010. "Analysing the effects of tax-benefit reforms on income distribution: a decomposition approach," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(1), pages 1-21, March.
    3. Chakravarty, Satya R. & Sarkar, Palash, 2022. "A synthesis of local and effective tax progressivity measurement," MPRA Paper 115180, University Library of Munich, Germany.
    4. John Bishop & K. Chow & John Formby & Chih-Chin Ho, 1997. "Did Tax Reform Reduce Actual US Progressivity? Evidence from the Taxpayer Compliance Measurement Program," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 4(2), pages 177-197, May.
    5. Caminada, Koen & Goudswaard, Kees, 1999. "Social policy and income distribution: An empirical analysis for the Netherlands," MPRA Paper 20183, University Library of Munich, Germany.
    6. Koen Caminada & Kees Goudswaard, 2001. "International Trends in Income Inequality and Social Policy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(4), pages 395-415, August.

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