A Note on the Maximum Value of the Kakwani Index

Simone Pellegrino and Achille Vernizzi

No 47, Working papers from Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino

Abstract: The overall tax revenue of a real-world personal income tax cannot be eventually paid only by the richest taxpayer. Therefore, the maximum concentration coefficient for taxes cannot be equal to 1, and, consequently, the maximum value of the Kakwani index cannot be 1 minus the Gini coefficient for pre-tax incomes, as generally described in the related literature. We give evidence of this phenomenon by illustrating a theoretical example, and by evaluating its maximum value when a real-world tax is considered.

Keywords: Kakwani index; Redistributive effect; Personal income tax; Microsimulation models. (search for similar items in EconPapers)
JEL-codes: H23 H24 (search for similar items in EconPapers)
Pages: 5 pages
Date: 2017-12
New Economics Papers: this item is included in nep-ore and nep-pub
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http://www.bemservizi.unito.it/repec/tur/wpapnw/m47.pdf First version, 2017 (application/pdf)

Related works:
Journal Article: A note on the maximum value of the Kakwani index (2020)
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