Redistributive effects of minimal equal sacrifice taxation. (Q1810428)
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English | Redistributive effects of minimal equal sacrifice taxation. |
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Redistributive effects of minimal equal sacrifice taxation. (English)
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9 June 2003
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This paper shows that minimal equal sacrifice taxation, taxes are set in such a way that the utility sacrifice is equated across individuals, reduces after-tax income inequality (monotonically with the tax revenue to be raised) if, and only if, the elasticity of the marginal utility of income is decreasing. After tax inequality declines as the utility function becomes more concave.
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progressive taxation
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income inequality
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