Abstract
This paper addresses the problem of the normative evaluation of income tax systems and income tax reforms. While most of the existing criteria, framed in the utilitarian tradition, are uniquely based on information about individual incomes, this paper, building upon the opportunity egalitarian theory, proposes new equity criteria which take into account also the socio-economic characteristics of individuals. Suitable dominance conditions that can be used to rank alternative tax systems are derived by means of an axiomatic approach. Moreover, the theoretical results are used to assess the redistributive effects of an hypothetical tax reform in Romania through a microsimulation analysis.
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The data generated during the current study are available from the corresponding author on reasonable request.
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The authors (Paolo Brunori, Flaviana Palmisano, Vito Peragine) declare that there are no interests to disclose.
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The empirical part of this paper was realized thanks to the financial support of the Inclusive Growth Research Infrastructure Diffusion (InGRID) and the essential help of Silvia Avram.
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Brunori, P., Palmisano, F. & Peragine, V. Income taxation and equity: new dominance criteria with a microsimulation application. J Econ Inequal 20, 509–536 (2022). https://doi.org/10.1007/s10888-022-09537-7
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DOI: https://doi.org/10.1007/s10888-022-09537-7