We compare the tax burden distribution across incomes and the income share distribution, based on a stochastic dominance approach. We find conditions to assess the progressivity of different sources of taxes, given knowledge of the income share elasticities, which measure the relative marginal change in the income share accruing to each class of income, associated to a marginal increase in income. We first consider a simple setting with only indirect taxes and then extend it to savings and direct taxation. The progressivity of a given set of taxes depends on the correlation between the relative incidence of the different sources of taxation and the income elasticity of household net expenditure. We use this approach to test empirically for the progressivity of the fiscal system.

Benassi C., Randon E. (2021). The distribution of the tax burden and the income distribution: theory and empirical evidence. ECONOMIA POLITICA, 38(3), 1087-1108 [10.1007/s40888-020-00207-3].

The distribution of the tax burden and the income distribution: theory and empirical evidence

Benassi C.
Primo
;
Randon E.
Ultimo
2021

Abstract

We compare the tax burden distribution across incomes and the income share distribution, based on a stochastic dominance approach. We find conditions to assess the progressivity of different sources of taxes, given knowledge of the income share elasticities, which measure the relative marginal change in the income share accruing to each class of income, associated to a marginal increase in income. We first consider a simple setting with only indirect taxes and then extend it to savings and direct taxation. The progressivity of a given set of taxes depends on the correlation between the relative incidence of the different sources of taxation and the income elasticity of household net expenditure. We use this approach to test empirically for the progressivity of the fiscal system.
2021
Benassi C., Randon E. (2021). The distribution of the tax burden and the income distribution: theory and empirical evidence. ECONOMIA POLITICA, 38(3), 1087-1108 [10.1007/s40888-020-00207-3].
Benassi C.; Randon E.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/809289
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