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| Author: | Moyes, P. Shorrocks, A. |
| Title: | The impossibility of a progressive tax structure |
| Journal: | Journal of Public Economics
1998 : JUL, VOL. 69:1, p. 49-65 |
| Index terms: | Taxation Inequality Household economics |
| Language: | eng |
| Abstract: | When households are identical in all respects other than income, a non-decreasing average tax rate is both sufficient and necessary sufficient for post-tax incomes to be always at least as equal as pre-tax incomes. The paper investigates whether the well known result can be extended to households with different needs. A tax structure which never increases inequality is shown to be unable to discriminate btw. household types. If, in addition, the tax structure never reduces the relative income of the poorest applied to all households, and redistribution is impossible either within or btw. groups of households with differing needs. A similar conclusion is reached using conventional implications for tax design. |
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