International Tax and Public Finance

, Volume 21, Issue 4, pp 796–812 | Cite as

Rethinking the Pfähler–Lambert decomposition to analyse real-world personal income taxes

  • Jorge Onrubia
  • Fidel Picos-SánchezEmail author
  • María del Carmen Rodado


We provide a generalization and adaptation of the decomposition methodology by Pfähler (Bull Econ Res 42:121–129, 1990) and Lambert (The distribution and redistribution of income, 1st edn, 1989, The distribution and redistribution of income, 3rd edn, 2001), designed to assess the redistributive effect of personal income taxation. In particular, we generalize the methodology to several deductions, allowances, schedules or tax credits, making it suitable for real-world complex tax structures, especially dual income taxes. Additionally, we avoid the problem of sequentiality on the measurement of partial redistributive effects and also take into account the re-ranking effects of tax treatments not related to income. Finally we illustrate the utility of the methodology by carrying out an empirical analysis for the 2007 Spanish Personal Income Tax, which meant a shift from a quasi-comprehensive to a semi-dual income tax.


Decomposition Personal income tax Progressivity Redistribution 

JEL Classification

D31 H23 H24 



Earlier versions of this paper were presented at the 20th Public Economics Meeting on Public Economics (Seville, Spain, January 31–February 1 2013) and at the 69th Annual Congress of the IIPF (Taormina, Sicily, Italy, August 21–25 2013). We gratefully acknowledge the useful comments and suggestions received from Peter J. Lambert, Julio López-Laborda, Alessandro Sommacal and the participants in the abovementioned meetings. We also thank three anonymous referees. Any remaining errors are entirely our responsibility. We also thank the International Center for Public Policy (Georgia State University) for publishing an earlier version of this paper in its Working Paper series. Jorge Onrubia and M. Carmen Rodado thank the Spanish Ministry of Economy and Competitiveness (IV National Plan of Scientific Research, Development and Technology Innovation, Project ECO2012-37572). Fidel Picos-Sánchez acknowledges the financial support from Xunta de Galicia (‘Programa de Consolidación e Estruturación de Unidades de Investigación Competitivas’) and the European Regional Development Fund (ERDF).


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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Jorge Onrubia
    • 1
  • Fidel Picos-Sánchez
    • 2
    Email author
  • María del Carmen Rodado
    • 3
  1. 1.Departamento de Economía Aplicada VI, Facultad de Ciencias Económicas y EmpresarialesUniversidad Complutense de MadridPozuelo de Alarcón (Madrid)Spain
  2. 2.REDE and Departamento de Economía AplicadaUniversidade de VigoOurenseSpain
  3. 3.Departamento de Economía Aplicada II, Facultad de Ciencias Jurídicas y SocialesUniversidad Rey Juan CarlosMadridSpain

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