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Redistributive effects in a dual income tax system

Arnaldur Kristjánsson ()

No 187, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: Equity issues of the dual income tax have been left aside in the field of economics. Since a dual income tax needs different modelling than a comprehensive one this paper offers firstly a quantitative framework to measure redistributive effects; it turns out that this involves both direct and indirect effects. The effects of horizontal inequity and re-ranking are also incorporated into the decomposition analysis. The approach is applicable using available income and tax statistics. Secondly, partial effects of changes in tax parameters are presented; they are channelled through the direct and indirect effects; and are not always straightforward.

Keywords: redistributive effect; progressivity; dual income tax. (search for similar items in EconPapers)
JEL-codes: D63 H23 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2010
New Economics Papers: this item is included in nep-pbe and nep-pub
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Journal Article: Redistributive Effects in a Dual Income Tax System (2013) Downloads
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