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Capital Gains Taxation And Progressivity

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  • Julio López Laborda

    (Department of Public Economics, University of Zaragoza)

Abstract

This paper measures the local and effective progression of personal income tax, considering jointly the taxation of regular income and capital gains. The study demonstrates that, if capital gains increase more than proportionally compared to individuals’ regular income, the combined tax may be locally and effectively more progressive than the tax which is applied solely to regular income; however, post-tax income inequality will be lower in the latter case. The results obtained are used to design a flat tax to substitute the current personal income tax, obtaining the parameters –tax rate and deduction from the tax base– for that tax.

Suggested Citation

  • Julio López Laborda, "undated". "Capital Gains Taxation And Progressivity," Working Papers 1-06 Classification-JEL :, Instituto de Estudios Fiscales.
    • Handle: RePEc:hpe:wpaper:y:2006:i:1
    as

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    File URL: http://www.ief.es/documentos/recursos/publicaciones/papeles_trabajo/2006_01.pdf
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    References listed on IDEAS

    as
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    7. Miguel-Angel López García, 2005. "La vivienda y la reforma fiscal de 1998: un ejercicio de simulación," Hacienda Pública Española / Review of Public Economics, IEF, vol. 175(4), pages 123-147, december.
    8. repec:bla:ecorec:v:75:y:1999:i:231:p:397-404 is not listed on IDEAS
    9. José María Arranz & Carlos García-Serrano, "undated". "¿Qué Ha Sucedido Con La Estabilidad Del Empleo En España?. Un Análisis Desagregado Con Datos De La Epa: 1987-2003(*)," Working Papers 4-04 Classification-JEL :, Instituto de Estudios Fiscales.
    10. Jakobsson, Ulf, 1976. "On the measurement of the degree of progression," Journal of Public Economics, Elsevier, vol. 5(1-2), pages 161-168.
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    Cited by:

    1. Arnaldur Kristjánsson & Peter Lambert, 2015. "Structural progression measures for dual income tax systems," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(1), pages 1-15, March.
    2. Lambert Peter J. & Thoresen Thor O., 2012. "The Inequality Effects of a Dual Income Tax System," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-17, July.

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