The Inconsistency Between Measurement and Policy Instruments in Family Income Taxation

Peter J. Lambert and Shlomo Yitzhaki

FinanzArchiv: Public Finance Analysis, 2013, vol. 69, issue 3, 241-255

Abstract: There is an inconsistency between the way income tax progressivity is measured and the policy instruments typically used by the income tax authorities. This inconsistency leads to violation of Feldstein´s principle of horizontal equity and causes unintentional reranking among families of different sizes. Implications are considered. In particular, we provide a methodology for measuring the magnitude of the unintentional reranking in terms of forgone redistribution, and apply it to Israeli data.

Keywords: income tax; horizontal equity; allowance; exemption; child benefit (search for similar items in EconPapers)
JEL-codes: D63 H24 I3 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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DOI: 10.1628/001522108X671119

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