TY - JOUR
T1 - Should the rich be taxed more? The fiscal inequality coefficient
AU - Hatgioannides, John
AU - Karanassou, Marika
AU - Sala, Hector
N1 - Hector Sala is grateful to the Spanish Ministry of Economy and Competitiveness for financial support through grant ECO2016-75623-R.
PY - 2019
Y1 - 2019
N2 - This article holistically addresses the effective (relative) income tax contribution of a given income (or, wealth) group. The widely acclaimed standard in public policy is the absolute benefaction of a given income group in filling up the fiscal coffers. Instead, we focus on the ratio of the average income tax rate of an income group divided by the percentage of national income (or wealth) appropriated by the same income group. In turn, we develop the Fiscal Inequality Coefficient which compares the effective percentage income tax payments of pairs of income (or wealth) groups. Using data for the United States, we concentrate on pairs such as the Bottom 90% versus Top 10%, Bottom 99% versus Top 1%, and Bottom 99.9% versus Top 0.1%. We conclude that policy makers with a strong social conscience should re-evaluate the progressivity of the income tax system and make the richest echelons of the income and wealth distributions pay a fairer and higher tax.
AB - This article holistically addresses the effective (relative) income tax contribution of a given income (or, wealth) group. The widely acclaimed standard in public policy is the absolute benefaction of a given income group in filling up the fiscal coffers. Instead, we focus on the ratio of the average income tax rate of an income group divided by the percentage of national income (or wealth) appropriated by the same income group. In turn, we develop the Fiscal Inequality Coefficient which compares the effective percentage income tax payments of pairs of income (or wealth) groups. Using data for the United States, we concentrate on pairs such as the Bottom 90% versus Top 10%, Bottom 99% versus Top 1%, and Bottom 99.9% versus Top 0.1%. We conclude that policy makers with a strong social conscience should re-evaluate the progressivity of the income tax system and make the richest echelons of the income and wealth distributions pay a fairer and higher tax.
KW - Effective income tax rate
KW - Fiscal inequality coefficient
KW - Fiscal policy
KW - Inequality
KW - Progressive income taxation
UR - http://www.scopus.com/inward/record.url?scp=85068073349&partnerID=8YFLogxK
U2 - 10.1080/00213624.2019.1646624
DO - 10.1080/00213624.2019.1646624
M3 - Article
AN - SCOPUS:85068073349
SN - 0021-3624
VL - 53
SP - 879
EP - 887
JO - Journal of Economic Issues
JF - Journal of Economic Issues
IS - 3
ER -