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Structural progression measures for dual income tax systems

Abstract

We extend the measurement of structural progression to a pure-form dual income tax (DIT), which combines progressive taxation of labour income with proportional taxation of income from capital at a lower rate. Further, we examine the effect of the DIT’s structural progression on the responsiveness of aggregate revenue to income growth, and we demonstrate how progression measures can aid in redistributive analysis, using Nordic data to highlight problems which can stem from pre-tax distributional changes. We conclude with an assessment of the new theoretical and empirical work that is now called for.

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Correspondence to Peter J. Lambert.

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Kristjánsson, A.S., Lambert, P.J. Structural progression measures for dual income tax systems. J Econ Inequal 13, 1–15 (2015). https://doi.org/10.1007/s10888-014-9287-6

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Keywords

  • Dual income tax
  • Personal income tax
  • Structural progression

JEL Classification

  • D31
  • D63
  • H23