The Inconsistency between Measurement and Policy Instruments in Family Income Taxation

13 Pages Posted: 25 Mar 2011

See all articles by Peter J. Lambert

Peter J. Lambert

University of Oregon - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Shlomo Yitzhaki

Hebrew University of Jerusalem - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: March 18, 2011

Abstract

The aim of this paper is to point out an inconsistency between the way income tax progressivity is measured and the policy instruments used by the income tax authorities. This inconsistency leads to violation of Feldstein's principle of horizontal equity and causes unintentional reranking among families of different sizes. The paper provides a methodology for measuring the magnitude of the unintentional reranking in terms of foregone redistribution.

Suggested Citation

Lambert, Peter J. and Yitzhaki, Shlomo, The Inconsistency between Measurement and Policy Instruments in Family Income Taxation (March 18, 2011). Available at SSRN: https://ssrn.com/abstract=1789646 or http://dx.doi.org/10.2139/ssrn.1789646

Peter J. Lambert

University of Oregon - Department of Economics ( email )

Eugene, OR 97403
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Shlomo Yitzhaki (Contact Author)

Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, 91905
Israel
+972 2 659 2201 (Phone)
+972 2 652 2319 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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