Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/204780
Authors: 
Onrubia Fernández, Jorge
Picos, Fidel
Rodado, María del Carmen
Year of Publication: 
2019
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [ISSN:] 1864-6042 [Volume:] 13 [Year:] 2019 [Issue:] 2019-41 [Pages:] 1-31
Abstract: 
The authors analyze to what extent and how the tax burden should be shifted towards top income earners in order to reduce income inequality. Starting from Lambert and Aronson (Inequality decomposition analysis and the Gini coefficient revisited 1993) and Alvaredo (A note on the relationship between top income shares and the Gini coefficient 2011) decomposition by income groups, they prove that for three types of revenue-neutral linear personal income tax reforms (PIT) based on Pfähler (1984) the redistributive effect is always higher than before the reform; and when the size of the rich group is sufficiently small (e.g. 1%), the best option is allocating tax changes proportionally to net income, and the worst doing it proportionally to tax liabilities. An empirical illustration of the theoretical results is provided using micro data from the Spanish PIT.
Subjects: 
top incomes
inequality
personal income tax
progressivity
redistribution
JEL: 
D31
D33
D63
H23
H24
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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