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Do Benefit and Equal Absolute Sacrifice Rules Really Lead To Different Taxation Levels?

Author

Listed:
  • Paul Burgat

    (University of Neuchâtel)

  • Claude Jeanrenaud

    (University of Neuchâtel)

Abstract

The benefit and ability to pay principles of public finance are generally presented as two different concepts of fiscal equity. Redistributive taxes are generally based on the ability to pay principle. The authors show that in the case of pure public goods, under specific conditions, the benefit and the equal absolute sacrifice rules lead to very similar taxation levels. Therefore the choice of taxation rules is of secondary importance. By contrast, the value of the elasticity of marginal income utility plays a primary role.

Suggested Citation

  • Paul Burgat & Claude Jeanrenaud, 1996. "Do Benefit and Equal Absolute Sacrifice Rules Really Lead To Different Taxation Levels?," Public Finance Review, , vol. 24(2), pages 148-162, April.
    • Handle: RePEc:sae:pubfin:v:24:y:1996:i:2:p:148-162
    DOI: 10.1177/109114219602400202
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    References listed on IDEAS

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    1. Aaron, Henry & McGuire, Martin, 1970. "Public Goods and Income Distribution," Econometrica, Econometric Society, vol. 38(6), pages 907-920, November.
    2. Kovenock, Daniel & Sadka, Efraim, 1981. "Progression under the benefit approach to the theory of taxation," Economics Letters, Elsevier, vol. 8(1), pages 95-99.
    3. Young, H. P., 1987. "Progressive taxation and the equal sacrifice principle," Journal of Public Economics, Elsevier, vol. 32(2), pages 203-214, March.
    4. Keller, Wouter J & Hartog, Joop, 1977. "Income Tax Rates and Proportional Sacrifice," Public Finance = Finances publiques, , vol. 32(3), pages 321-332.
    5. Tresch, Richard W., 2014. "Public Finance," Elsevier Monographs, Elsevier, edition 3, number 9780124158344.
    6. Maital, Shlomo, 1973. "Public Goods and Income Distribution: Some Further Results," Econometrica, Econometric Society, vol. 41(3), pages 561-568, May.
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