Horizontal Inequity and Vertical Redistribution

Peter J. Lambert, Xavier Ramos

Research output: Contribution to journalArticleResearchpeer-review

37 Citations (Scopus)


Inequality of post-tax income among pre-tax equals is evaluated and aggregated to form a global index of horizontal inequity in the income tax. The vertical action of the tax is captured by its inequality effect on average between groups of pre-tax equals. Putting the two together, horizontal inequity measures loss of vertical performance. The identification problem, which has previously been thought insuperable, is addressed by a procedure validating the banding of income units into 'close equals' groups. The horizontal and vertical effects of a major Spanish income tax reform are evaluated. Lines for future investigation are suggested.
Original languageEnglish
Pages (from-to)25-37
JournalInternational Tax and Public Finance
Issue number1
Publication statusPublished - 1 Jan 1997


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