EconStor >
Forschungsinstitut zur Zukunft der Arbeit (IZA), Bonn >
IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA) >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/67217
  
Title:Unequal inequalities: Do progressive taxes reduce income inequality? PDF Logo
Authors:Duncan, Denvil
Sabirianova Peter, Klara
Issue Date:2012
Series/Report no.:Discussion Paper Series, Forschungsinstitut zur Zukunft der Arbeit 6910
Abstract:This paper analyzes the effect of changes in structural progressivity of national income tax systems on observed and actual income inequality. Using several unique measures of progressivity over the 1981-2005 period for a large panel of countries, we find that progressivity reduces inequality in observed income, but has a significantly smaller impact on actual inequality, approximated by consumption-based GINIs. We show empirically that the differential effect on observed vs. actual inequality is much larger in countries with weaker legal institutions. Substantial differences in inequality response to changes in top vs. bottom rates are also uncovered. The paper discusses implications of these results for flat tax policies.
Subjects:income inequality
Gini
personal income tax
structural progressivity
tax evasion
JEL:H2
I3
J3
O1
O2
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

Files in This Item:
File Description SizeFormat
72755350X.pdf639.76 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/67217

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.