A theoretical and practical study on linear reforms of dual taxes

Samuel Calonge and Oriol Tejada

No 218, Working Papers in Economics from Universitat de Barcelona. Espai de Recerca en Economia

Abstract: We extend the linear reforms introduced by Pf ahler (1984) to the case of dual taxes. We study the relative effect that linear dual tax cuts have on the inequality of income distribution -a symmetrical study can be made for dual linear tax hikes-. We also introduce measures of the degree of progressivity for dual taxes and show that they can be connected to the Lorenz dominance criterion. Additionally, we study the tax liability elasticity of each of the reforms proposed. Finally, by means of a microsimulation model and a considerably large data set of taxpayers drawn from 2004 Spanish Income Tax Return population, 1) we compare different yield-equivalent tax cuts applied to the Spanish dual income tax and 2) we investigate how much income redistribution the dual tax reform (Act 35/2006) introduced with respect to the previous tax.

JEL-codes: E60 E62 (search for similar items in EconPapers)
Pages: 0 pages
Date: 2009
New Economics Papers: this item is included in nep-acc, nep-mac, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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