Inequality reducing properties of progressive income tax schedules: The case of endogenous income

• 成果类型: Article
• 署名作者: Carbonell-Nicolau, Oriol; Llavador, Humberto
• 署名单位: Rutgers University System; Rutgers University New Brunswick; Pompeu Fabra University; Barcelona School of Economics
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1555-7561
• DOI: 10.3982/TE2533
• 发表日期: 2018-01-01
• 页码: 39-60
• 关键词: Progressive taxation; income inequality; incentive effects of taxation

摘要

The case for progressive income taxation is often based on the classic result of Jakobsson, 1976 and Fellman, 1976, according to which progressive and only progressive income taxesin the sense of increasing average tax rates on incomeensure a reduction in income inequality. This result has been criticized on the grounds that it ignores the possible disincentive effect of taxation on work effort, and the resolution of this critique has been a longstanding problem in public finance. This paper provides a normative rationale for progressivity that takes into account the effect of an income tax on labor supply. It shows that a tax schedule is inequality reducing only if it is progressivein the sense of increasing marginal tax rates on incomeand identifies a necessary and sufficient condition on primitives under which progressive and only progressive taxes are inequality reducing.