Taxation, Reranking and Equivalence Scales

John Creedy and Justin van de Ven

No 782, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: This paper considers the relationship between equivalence scales and the reranking effects of taxation. The impact on reranking of varying an equivalence scale is divided into two effects. The first, referred to as the direct effect, increases reranking as the equivalence scale used departs from the scale that implicitly underlies the tax system. The second, referred to as the indirect effect, increases reranking as measures of adult equivalent income increase. It is argued that the equivalence scale that underlies a tax system is likely to be in the neighbourhood of the scale that minimises reranking Household data from Australia and the UK are analysed.

Keywords: TAXATION; TAX SYSTEMS; INCOME (search for similar items in EconPapers)
JEL-codes: H22 H23 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2001
Note: This paper has now been published in: Creedy, J. and Van de Ven, J. (2005) Taxation, Reranking and Equivalence Scales, Bulletin of Economic Research, 57, no.1, pp. 13-36.
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Related works:
Journal Article: Taxation, Reranking and Equivalence Scales (2005)
Working Paper: Taxation, Reranking and Equivalence Scales (2003)
Working Paper: Taxation, Reranking and Equivalence Scales (2003)
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