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On the Relative Equitability of a Family of Taxation Rules
Author(s) -
MORENOTERNERO JUAN D.,
VILLAR ANTONIO
Publication year - 2006
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2006.00264.x
Subject(s) - economics , distribution (mathematics) , income tax , population , gross income , income distribution , econometrics , microeconomics , mathematical economics , state income tax , public economics , mathematics , tax reform , inequality , demography , mathematical analysis , sociology
A taxation problem consists of collecting a given amount of taxes out of a population whose gross income vector is given. A tax rule R is more equitable than a rule R ′ when the after‐tax income vector generated by R Lorenz dominates that generated by R ′. In this paper, we present a one‐parameter family of tax rules whose members are fully ranked in terms of relative equitability, for any (finite) income distribution.