EconPapers    
Economics at your fingertips  
 

Redistribution, horizontal inequity, and reranking: direct taxation in the UK, 1977–2020

Nicolas Herault and Stephen Jenkins

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We decompose the redistributive effect of direct taxes into vertical, horizontal, and reranking components applying the methods of Urban and Lambert (Public Finance Review, 2008). In the first such application to the UK, and using yearly data covering 1977–2020, we find that redistributive effect increased over the period. However, there is no clear trend in horizontal inequity and this component forms a very small fraction of total redistributive effect by comparison with reranking and especially vertical components. It is also the vertical component that best tracks trends in redistributive effect. We give specific attention to the choice of the bandwidth used to define ‘close equals’ in terms of pre-tax income. We also show that implausible estimates of the horizontal inequity component arise for some years regardless of bandwidth used.

Keywords: redistributive effect; redistribution; horizontal inequity; reranking; urban-Lambert decomposition; income tax (search for similar items in EconPapers)
JEL-codes: D31 H24 H50 I38 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2023-12-01
New Economics Papers: this item is included in nep-eec, nep-ltv, nep-pbe and nep-pub
References: Add references at CitEc
Citations:

Downloads: (external link)
http://eprints.lse.ac.uk/120996/ Open access version. (application/pdf)

Related works:
Working Paper: Redistribution, horizontal inequity, and reranking: Direct taxation in the UK, 1977–2020 (2023) Downloads
Working Paper: Redistribution, Horizontal Inequity, and Reranking: Direct Taxation in the UK, 1977–2020 (2023) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:120996

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager (lseresearchonline@lse.ac.uk).

 
Page updated 2024-12-31
Handle: RePEc:ehl:lserod:120996