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ASSESSING THE PERFORMANCE OF AN INCOME TAX
Author(s) -
Duclos JeanYves
Publication year - 1995
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.1995.tb00605.x
Subject(s) - economics , residual , welfare , public economics , income tax , social welfare , constant (computer programming) , progressive tax , tax basis , microeconomics , indirect tax , state income tax , econometrics , tax reform , gross income , computer science , market economy , algorithm , political science , law , programming language
The paper proposes an indicator of the performance of a tax and benefit system in generating a high level of social welfare. Under standard assumptions on the form of the admissible social welfare functions, the indicator is shown to be increasing in the progressivity of the system. Using UK household data for 1985, the paper asks (i) What can the performance of a tax system with constant residual progression be? (ii) Relative to a proportional system, what is the performance of existing or proposed tax and benefit systems? (iii) How can we estimate the average residual progression of unevenly progressive tax and benefit systems?