Progression-neutral income tax reforms and horizontal inequity

Zeitschrift für Nationalökonomie - 2014
Maria Cubel1, Peter J. Lambert2
1Department of Public Finance, University of Barcelona, Barcelona, Spain
2Department of Economics and Related Studies, University of York, Heslington, England

Tóm tắt

A switch from any given income tax schedule to a tax structure in which two groups of taxpayers are treated differently, each still facing the same degree of progression, can induce an increase in welfare despite causing horizontal inequity (HI). The thrust of much recent research, however, is that removing the HI from an income tax system, by replacing it with a schedule, is itself welfare improving. In this note we reconcile these results, showing that acceptance of HI can be second-best when government must operate with a limited bundle of income tax parameters.

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Tài liệu tham khảo

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