Identifying Tax Implicit Equivalence Scales

Justin van de Ven, Nicolas Hérault and Francisco Azpitarte ()
Additional contact information
Francisco Azpitarte: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; Brotherhood of St Laurence, http://melbourneinstitute.com/staff/far/default.html

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: This paper describes a simple and tractable method for identifying equivalence scales that reflect the value judgements implicit in a tax and benefits system. The approach depends upon two assumptions that are standard in the literature concerned with inequality and tax progressivity, in addition to a functional description for transfer payments that can be estimated using common micro-data sources. We use this approach to evaluate tax implicit equivalence scales for the UK transfer system that applied in April 2009. The tax implicit scales that we identify for the UK vary positively with tax unit size and are decreasing in gross earnings, reflecting recent econometric estimates based on consumption data. We conclude by discussing a range of potential applications for the proposed tax implicit scales.

Keywords: Equivalence scale; taxation; base dependence (search for similar items in EconPapers)
JEL-codes: D31 H23 I38 (search for similar items in EconPapers)
Pages: 15pp
Date: 2014-03
New Economics Papers: this item is included in nep-ger, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://melbourneinstitute.unimelb.edu.au/downloads ... series/wp2014n03.pdf (application/pdf)

Related works:
Journal Article: Identifying tax implicit equivalence scales (2017)
Journal Article: Identifying tax implicit equivalence scales (2017)
Working Paper: Identifying Tax Implicit Equivalence Scales (2015)
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:iae:iaewps:wp2014n03

Access Statistics for this paper

More papers in Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Sheri Carnegie ().