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Tax Burden Degree as a Tool to Design Tax Systems

Author

Listed:
  • Alcalde, José

    (Universidad de Alicante, Departamento de Métodos Cuantitativos y Teoría Económica)

  • Marco-Gil, María del Carmen

    (Dep. of Economics, Polytechnic University of Cartagena)

  • Silva-Reus, José A.

    (Universitat d'Alacant. Departament de Mètodes Quantitatius i Teoría Econòmica and Instituto Universitario Desarrollo Social y Paz (IUDESP))

Abstract

This paper explores an integrated taxation system. Taking as a premise the proposals by the Carter Commission Report, we find out that proportional tax is the unique system that allows to neutrally integrate the taxable income. This analysis leads to explore new tax rules combining the extreme cases of `Flat Tax' and `Equalizing Net Income' rules. As a conclusion we suggest the Equitably Compensatory tax rule which accurately combines both extreme principles. Surprisingly enough, this rule coincides with the Proportional rule for societies whose income is not too unequally distributed.

Suggested Citation

  • Alcalde, José & Marco-Gil, María del Carmen & Silva-Reus, José A., 2012. "Tax Burden Degree as a Tool to Design Tax Systems," QM&ET Working Papers 12-11, University of Alicante, D. Quantitative Methods and Economic Theory.
    • Handle: RePEc:ris:qmetal:2012_011
    as

    Download full text from publisher

    File URL: http://web.ua.es/es/dmcte/documentos/qmetwp1211.pdf
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    References listed on IDEAS

    as
    1. R. A. Musgrave, 1968. "The Carter Commission Report," Canadian Journal of Economics, Canadian Economics Association, vol. 1(s1), pages 159-182, February.
    2. Aumann, Robert J. & Maschler, Michael, 1985. "Game theoretic analysis of a bankruptcy problem from the Talmud," Journal of Economic Theory, Elsevier, vol. 36(2), pages 195-213, August.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. José Alcalde & María Carmen Marco-Gil & José Silva-Reus, 2014. "The minimal overlap rule: restrictions on mergers for creditors’ consensus," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 22(1), pages 363-383, April.

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    More about this item

    Keywords

    Tax burden degree; Taxation system; Prop ortional taxation;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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