Social Choice and Welfare

, Volume 30, Issue 4, pp 561–569 | Cite as

On the equivalence between progressive taxation and inequality reduction

Original Paper

Abstract

We establish the precise connections between progressive taxation and inequality reduction, in a setting where the level of tax revenue to be raised is exogenously fixed and tax schemes are balanced. We show that, in contrast with the traditional literature on taxation, the equivalence between inequality reduction and the combination of progressivity and income order preservation does not always hold in this setting. However, we show that, among rules satisfying consistency and, either revenue continuity, or revenue monotonicity, the equivalence remains intact.

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Copyright information

© Springer-Verlag 2007

Authors and Affiliations

  1. 1.Department of EconomicsKorea UniversitySeoulSouth Korea

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