A proposal for a simple average-based progressive taxation system

Dirk-Hinnerk Fischer () and Simona Ferraro ()
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Dirk-Hinnerk Fischer: Tallinn University of Technology, Tallinn, Estonia
Simona Ferraro: Tallinn University of Technology, Tallinn, Estonia

Public Sector Economics, 2019, vol. 43, issue 2, 141-165

Abstract: This paper is a first theoretical presentation of a simple progressive taxation system. The system is based on two adaptations of one easily calculable formula that is based on the societal average income of the previous year. The system contributes to academic discussions as it is a novel approach. It is a progressive tax that does not discriminate against anyone as the progression increases continuously and the increase in tax payment does not go beyond the additional income. The analysis in the paper shows that the core advantage of the system is its simple, transparent and adaptable mechanism.

Keywords: taxation; flat tax; progressive tax; taxation efficiency (search for similar items in EconPapers)
JEL-codes: H21 H24 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ipf:psejou:v:43:y:2019:i:2:p:141-165

DOI: 10.3326/pse.43.2.2

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